EXHIBIT 2.3
STOCK PURCHASE AGREEMENT
between
BSN GLASSPACK N.V.
and
SAXOPHONE B.V.
DATED AS OF DECEMBER 31, 2002
TABLE OF CONTENTS
PREAMBLE; RECITALS.............................................................................1
ARTICLE 1 SALE AND PURCHASE OF SHARES AND ADJUSTED DEBT..................................................2
1.1. Sale and Purchase............................................................................2
1.2. Adjustment of Debt...........................................................................2
1.3. Purchase Price...............................................................................2
1.4. Manner of Payments...........................................................................2
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................................................2
2.1. Organization; Authority; Execution...........................................................3
2.2. Consents and Notices.........................................................................3
2.3. Effect of the Transaction....................................................................3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLER...................................................3
3.1. Organization; Authority; Execution...........................................................3
3.2. Capital......................................................................................4
3.3. Ownership of Stock...........................................................................5
3.4. Consents and Notices.........................................................................6
3.5. Effect of the Transaction....................................................................6
3.6. Compliance with Law..........................................................................7
3.7. Accounting and Financial Documents...........................................................8
3.8. Conduct of business..........................................................................8
3.9. Real Property...............................................................................10
3.10. Movable Property and Businesses.............................................................11
3.11. Intellectual Property Rights................................................................11
3.12. Indebtedness................................................................................11
3.13. Receivables.................................................................................12
3.14. Contracts...................................................................................12
3.15. Cancellation of related-party contracts and satisfaction of debts...........................13
3.16. Subsidies...................................................................................14
3.17. [intentionally omitted].....................................................................14
3.18. Employment Matters..........................................................................14
3.19. Pension and Other Employee Benefits Matters.................................................16
3.20. Tax, Social Security, Customs...............................................................17
3.21. Litigation..................................................................................18
3.22. Product Liability...........................................................................18
3.23. Bank Accounts and Signature Powers..........................................................18
3.24. Intermediaries..............................................................................19
3.25. Completeness of Representations and Warranties..............................................19
3.26. Seller's knowledge..........................................................................19
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ARTICLE 4 COVENANTS OF THE PURCHASER....................................................................19
4.1. Best efforts undertaking....................................................................19
4.2. Confidentiality.............................................................................19
4.3. Non-solicitation............................................................................19
4.4. Transfer of cash............................................................................20
4.5. Cooperation in limiting application of fiscal unity anti-abuse rules........................20
4.6. Distribution agreements.....................................................................20
ARTICLE 5 COVENANTS OF THE SELLER.......................................................................20
5.1. Best efforts undertaking....................................................................21
5.2. Confidentiality.............................................................................21
5.3. Non-competition and non-solicitation........................................................21
5.4. Pension Matters.............................................................................22
5.5. Allocation of electricity...................................................................28
5.6. Service Agreement...........................................................................28
5.7. Disposition of real property and certain assets.............................................28
5.8. Purchase of Crystal products................................................................31
5.9. Insurance...................................................................................32
ARTICLE 6 OPTION TO TRANSFER CRYSTAL....................................................................32
6.1. Put; term...................................................................................32
6.2. Exercise....................................................................................32
6.3. Purchase of Additional Crystal Shares and rescheduling of Crystal Debt......................32
6.4. Extension of Put............................................................................33
6.5. Management of Crystal.......................................................................33
6.6. Lead Crystal Product operations.............................................................34
6.7. Trademark and trade name matters............................................................34
6.8. Consequences of exercise....................................................................34
ARTICLE 7 INDEMNIFICATION OF PURCHASER..................................................................38
7.1. Indemnification.............................................................................38
7.2. Environmental Matters.......................................................................38
7.3. Calculation of Damages......................................................................40
7.4. Method of Asserting Claims, etc.............................................................40
7.5. De minimis..................................................................................45
7.6. Deductible..................................................................................45
7.7. Maximum Amount..............................................................................45
7.8. Exceptions to limitations on indemnification................................................46
7.9. Interest....................................................................................46
7.10. Deadlines for Claims........................................................................46
7.11. Release.....................................................................................46
7.12. Seller's activities.........................................................................47
7.13. Crystal.....................................................................................47
ARTICLE 8 INDEMNIFICATION OF SELLER.....................................................................47
8.1. Indemnification.............................................................................47
8.2. Company's activities........................................................................48
8.3. Claims procedure, etc.......................................................................48
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ARTICLE 9 DISPUTE RESOLUTION............................................................................48
9.1. Arbitration.................................................................................48
9.2. Language....................................................................................48
9.3. Waiver; enforcement.........................................................................48
ARTICLE 10 INTERPRETATION; DEFINITIONS...................................................................49
10.1. Headings....................................................................................49
10.2. Sections....................................................................................49
10.3. Definitions.................................................................................49
ARTICLE 11 GENERAL PROVISIONS............................................................................56
11.1. Cooperation.................................................................................56
11.2. Announcements...............................................................................56
11.3. Assignment..................................................................................56
11.4. Third Party Beneficiaries...................................................................56
11.5. Entire Agreement............................................................................57
11.6. Severability................................................................................57
11.7. Notices and Communications..................................................................57
11.8. Costs.......................................................................................58
11.9. No Waiver...................................................................................58
11.10. Governing Law...............................................................................58
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TABLE OF ANNEXES
ANNEX 3.1 EXTRACTS FROM TRADE REGISTER AND ORGANIZATIONAL DOCUMENTS
ANNEX 3.4 CONSENTS AND NOTICES
ANNEX 3.5 EFFECTS OF TRANSACTION
ANNEX 3.7(a) 2001 FINANCIAL STATEMENTS
ANNEX 3.7(b) 2002 FINANCIAL STATEMENTS
ANNEX 3.7(d) CRYSTAL 2002 FINANCIAL STATEMENTS
ANNEX 3.8 CONDUCT OF BUSINESS EXCEPTIONS
ANNEX 3.9(a) REAL PROPERTY OWNERSHIP
ANNEX 3.9(b) REAL PROPERTY LEASES
ANNEX 3.10 ASSETS USED BUT NOT OWNED OR LEASED
ANNEX 3.11(a) INTELLECTUAL PROPERTY OWNERSHIP
ANNEX 3.11(b) INTELLECTUAL PROPERTY LICENSES
ANNEX 3.14 MATERIAL CONTRACTS
ANNEX 3.15(b) FOREIGN EXCHANGE CONTRACT
ANNEX 3.16 SUBSIDIES
ANNEX 3.18(a) LABOR DISPUTES
ANNEX 3.18(b) COLLECTIVE AGREEMENTS AND BENEFITS
ANNEX 3.18(c) EMPLOYEES
ANNEX 3.18(d) EMPLOYMENT AGREEMENTS
ANNEX 3.18(g) PENDING LABOR VIOLATION CLAIMS
ANNEX 3.19(a) PENSION AND OTHER BENEFIT COMMITMENTS
ANNEX 3.19(b) BSN PLAN
ANNEX 3.20(c) TAX PROCEEDINGS
ANNEX 3.20(e) TAX BURDENS
ANNEX 3.20(g) TAX ELECTIONS
ANNEX 3.21 LITIGATION
ANNEX 3.23 ACCOUNTS AND SIGNATORIES
ANNEX 4.5 REQUEST BY FISCAL UNITY
ANNEX 5.4(c) ABTN
ANNEX 5.4(k) EMPLOYEES ON LONG-TERM SICK LEAVE
ANNEX 5.6 FORM OF SERVICE AGREEMENT
ANNEX 5.7(a) LAND USE AND OWNERSHIP MAP
ANNEX 5.7(d) EXCLUSIVE USE ASSETS
ANNEX 5.7(e) FORM OF ASSIGNMENT OF LEASE WITH BUIJS
ANNEX 5.9 TRANSITIONAL INSURANCE COVERAGE
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of December 31, 2002 (this "AGREEMENT"),
is between BSN Glasspack N.V., a limited liability company (naamloze
vennootschap) organized under the Laws of the Netherlands and having its
registered seat at Schiedam and its principal place of business at
Buitenhavenweg 116, 3113 BE Schiedam (the "SELLER") and Saxophone B.V., a
limited liability company (besloten vennootschap met beperkte aansprakelijkheid)
organized under the Laws of the Netherlands and having its registered seat at
Amsterdam and its principal place of business at Koningslaan 34, 1075 AD
Amsterdam (the "PURCHASER"). The Seller and the Purchaser are referred to herein
collectively as the "PARTIES" and individually as a "PARTY".
RECITALS
A. The Seller is the owner of all of the shares in the capital, consisting
of eight hundred and twenty (820) registered shares with a nominal
value of Euro 100 (one hundred euro) each and numbered 1 to 820 (the
"SHARES"), of B.V. Koninklijke Nederlandsche Glasfabriek Leerdam, a
limited liability company (besloten vennootschap met beperkte
aansprakelijkheid) organized under the Laws of the Netherlands and
having its registered seat at Leerdam and its principal place of
business at Lingedijk 8, 4142 LD Leerdam (the "COMPANY"). The Company
has a debt owed under a current account maintained with the Seller
amounting to Euro 31,217,051.57 (including accrued interest through
December 27, 2002) as of the date hereof (the "DEBT").
B. The Purchaser has conducted a due diligence investigation of the
Company and, for that purpose, was given access to certain confidential
information about the Company by the Seller and the Company.
C. The Company is the owner of all of the shares in the capital,
consisting of hundred and forty (140) registered shares with a nominal
value of Euro 100 (one hundred euro) each and numbered 1 to 140, of
B.V. Leerdam Crystal, a limited liability company (besloten
vennootschap met beperkte aansprakelijkheid) organized under the laws
of the Netherlands and having its registered seat at Leerdam and its
principal place of business at Lingedijk 8, 4142 LD Leerdam
("CRYSTAL"). Crystal has a debt owed under a current account maintained
with BSN Glasspack Finance amounting to Euro 1,906,360.78 (including
accrued interest through December 27, 2002) as of the date hereof (the
"CRYSTAL DEBT").
D. The Seller wishes to sell and transfer, and the Purchaser wishes to
purchase, the Shares and the Debt (subject to adjustment as provided
herein).
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E. In light of the Purchaser's indirect acquisition of Crystal as a
subsidiary of the Company, the Purchaser wishes to obtain, and the
Seller agrees to grant, an option for the Purchaser to transfer Crystal
to the Seller within a specified period of time.
The Parties have therefore agreed as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES AND ADJUSTED DEBT
1.1. Sale and Purchase. Subject to the terms and conditions of this Agreement,
the Seller hereby sells and transfers to the Purchaser, and the Purchaser
hereby purchases from the Seller, the Shares and the Adjusted Debt, free
and clear of all Encumbrances, as well as all rights attaching to the
Shares (including entitlement to all of the dividends related to the
profits made by the Company during the 2002 fiscal year) and the Adjusted
Debt.
1.2. Adjustment of Debt. The amount of the Debt transferred hereunder (the
"ADJUSTED DEBT") shall be equal to the amount of the Debt, reduced by the
euro equivalent of the amount of cash transferred to the Seller pursuant
to Section 4.4. Such cash shall constitute a full repayment of the
portion of the Debt not transferred hereunder.
1.3. Purchase Price. The total consideration payable for the Shares and the
Adjusted Debt shall be forty-two million, three hundred thousand euro
(Euro 42,300,000) (the "PURCHASE PRICE"), payable on the date hereof, by
wire transfer in immediately available funds to the account no 30003
03620 00020117741 49 of the Seller opened with Societe Generale Paris
Opera - France (SWIFT Code SOGEFRPPHPO). The Purchase Price amount is
composed of an amount equal to the amount of the Adjusted Debt
attributable to the Adjusted Debt, and the remainder attributable to the
Shares.
1.4. Manner of Payments. All payments to be made pursuant to this Agreement
(other than the payment of the Purchase Price, which shall be paid in
accordance with Section 1.3) shall be made in euros, for same day value,
by wire transfer to the bank account notified in writing by the payee to
the payor no later than three Business Days before the date of payment.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants that the following statements are true and
correct as of the date hereof, unless otherwise stated:
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2.1. Organization; Authority; Execution.
(a) The Purchaser is a limited liability company duly organized and
validly existing under the Laws of the Netherlands, and has the
corporate power and authority to conduct its business as currently
conducted.
(b) The Purchaser has the power and authority to enter into this
Agreement and to carry out its obligations hereunder. The Purchaser
has duly authorized the execution of this Agreement and the
consummation of the Transaction, and no other corporate action on
the part of the Purchaser is necessary to authorize the execution by
it of this Agreement or the consummation of the Transaction.
(c) This Agreement has been duly executed by the Purchaser and
constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against it in accordance with its terms.
2.2. Consents and Notices. The Purchaser is not required to obtain any
Consents from, make any filings with, or give any notices to any
Governmental Authority or other Person that have not already been given
in connection with the execution or enforceability of this Agreement or
the consummation of the Transaction.
2.3. Effect of the Transaction. The execution of this Agreement by the
Purchaser, its performance of its obligations hereunder, and the
consummation by it of the Transaction does not give rise to any conflict
with, or violation or breach of, any provision of its organizational
documents (including by-laws), any obligation (whether contractual or
otherwise) of the Purchaser and/or one or more of its Affiliates, or of
any applicable Law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants that the following statements are true and
correct as of the date hereof, unless otherwise stated:
3.1. Organization; Authority; Execution.
(a) Each of the Seller, the Company and Crystal is a limited liability
company duly organized and validly existing under the Laws of the
Netherlands. Each of the Company and Crystal has the corporate power
and authority to own, lease and operate the assets held or used by
it and to conduct its business as currently conducted. The Company
is duly registered with the trade register (handelsregister)
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at the Chamber of Commerce of Tiel, and the information contained in
such trade register as reflected in extracts from such trade
register dated April 4, 2002, copies of which are attached as ANNEX
3.1, is correct and complete. A copy of the current organizational
documents of the Company is attached hereto as ANNEX 3.1.
(b) The Seller has the power and authority to enter into this Agreement
and to carry out its obligations hereunder. The Seller has duly
authorized the execution of this Agreement and the consummation of
the Transaction to the extent legally required, and no other
corporate action on the part of the Company, the Seller or the
Seller's Affiliates is necessary to authorize the execution by the
Seller of this Agreement or the consummation of the Transaction.
(c) This Agreement has been duly executed by the Seller, and constitutes
a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms.
(d) None of the Seller, the Company and Crystal is the subject of any
current or pending Proceeding under any bankruptcy, insolvency,
moratorium on payments, judicial composition, dissolution,
liquidation or any other debtor relief or similar Laws.
(e) There has been no proposal made or resolution adopted by any
competent corporate body of the Seller, the Company or Crystal for
the dissolution, liquidation, merger or split-up of any of them.
(f) The minute books or similar records of the Company contain an
accurate record of all meetings and other corporate action of its
stockholders, Board of Management or Directors or other governing
bodies, and any committees thereof, since January 1, 2000. All of
the registers, account books and corporate documents of the Company
have been and continue to be regularly maintained, and give a true
and fair account of the activities of the Company as required by
legislation, regulations or internal rules, subject to
irregularities that have no material adverse effect on the Company.
(g) The Seller has delivered to the Company, or the Company is otherwise
in possession of, all corporate documents of the Company or to which
the Company is entitled by Law.
3.2. Capital.
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(a) Other than the Shares, there are no outstanding shares or other
securities (including warrants) issued by the Company. All of the
Shares have been validly issued and are fully paid up. The Company
has not issued any depositary receipts of shares (certificaten van
aandelen). There are no options, warrants or other agreements or
undertakings pursuant to which the Company is or could be bound to
issue any shares or other securities (including warrants). No
securities issued by the Company are listed on any stock exchange or
unregulated market.
(b) Other than the shares in the capital of Crystal that are owned by
the Company, there are no outstanding shares or other securities
(including warrants) issued by Crystal. All of Crystal's shares have
been validly issued and are fully paid up. Crystal has not issued
any depositary receipts of shares (certificaten van aandelen). There
are no options, warrants or other agreements or undertakings
pursuant to which Crystal is or could be bound to issue any shares
or other securities (including warrants). No securities issued by
Crystal are listed on any stock exchange or unregulated market.
3.3. Ownership of Stock.
(a) The Seller is the unconditional legal and beneficial owner and the
holder of record of the Shares, free and clear of all Encumbrances.
The rights of the Seller with respect to the Shares are not subject
to revocation, rescission or any form of annulment whatsoever.
(b) None of the Shares have been transferred or encumbered in advance
(bij voorbaat), and Seller has not received any notice (betekening)
of an attachment (beslag) thereon;
(c) The Company is the unconditional legal and beneficial owner and the
holder of record of all of the shares in the capital of Crystal,
free and clear of all Encumbrances. The rights of the Company with
respect to such shares are not subject to revocation, rescission or
any form of annulment whatsoever. None of the shares of Crystal have
been transferred or encumbered in advance (bij voorbaat), and the
Company has not received any notice (betekening) of an attachment
(beslag) thereon.
(d) Other than the shares of Crystal, the Company does not own and has
not committed to acquire, directly or indirectly, any shareholding
or other interest in any corporation, partnership or other entity.
The Company does not serve as director or manager of any company or
entity, other than Crystal.
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3.4. Consents and Notices.
(a) Except as set out in ANNEX 3.4, none of the Seller, its Affiliates
or the Company is required to obtain any Consents from, make any
filings with, or give any notices to any Governmental Authority or
other Person in connection with the execution or enforceability of
this Agreement or the consummation of any part of the Transaction.
All Consents, filings or notices set out in ANNEX 3.4 have been
obtained, filed or given, in each case in writing.
(b) The works council of the Company has been duly informed of and
otherwise consulted on, and has given its advice on, the
Transaction, in accordance with the applicable collective bargaining
agreement and the Dutch Works Councils Act (Wet op de
ondernemingsraden).
(c) The relevant Dutch trade unions have been duly informed of the
Transaction in accordance with the Dutch Merger Code (SER - besluit
Fusiegedragsregels 2000 ter bescherming van de belangen van
werknemers).
3.5. Effect of the Transaction. Except as indicated in ANNEX 3.5, the
execution of this Agreement by the Seller, its performance of its
obligations hereunder, and the consummation by it of the Transaction does
not and will not constitute a breach of the Company's, the Seller's or
the Seller's Affiliates' obligations vis-a-vis third parties and, without
limiting the foregoing, will not give rise to any of the following:
(a) any conflict with, or violation of, any provision of the
organizational documents (including articles of association or
by-laws) of the Seller, its Affiliates or the Company;
(b) any conflict with, or violation or breach of, any applicable Law, or
to the Seller's best knowledge, any other obligation of the Company;
(c) any loss by the Company of any Subsidy, to the Seller's best
knowledge;
(d) any breach of or default or event that, with the lapse of time or
giving of notice would constitute a default, under any Contract of
the Company, to the Seller's best knowledge, or any contractual
cause for early termination of or acceleration of payment under any
Contract of the Company, to the Seller's best knowledge;
(e) any obligation to pay a bonus or indemnity of any type whatsoever to
any employee or corporate executive of the Company, to the Seller's
best knowledge;
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(f) any change to, suspension, cancellation or withdrawal of, any
Consent granted to the Company, or any favorable Tax or Social
benefit or regime enjoyed by the Company, to the Seller's best
knowledge;
(g) any entitlement for any party to be released from its obligations
under the terms of any guarantee, comfort letter or other similar
document issued as a surety or in support of any undertakings by the
Company, to the Seller's best knowledge;
(h) any registration or creation of a pledge or other security interest
on the assets of the Company, to the Seller's best knowledge; and
(i) any impairment to the continued ownership and use by the Company of
the Intellectual Property Rights set out in ANNEX 3.11(a), to the
Seller's best knowledge,
unless such events or circumstances set out in paragraphs (b) through (i)
would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), income, properties,
Liabilities or operations of the Company, or on the Purchaser's ownership
of the Shares and the Adjusted Debt.
3.6. Compliance with Law. To the Seller's best knowledge:
(a) The Company is currently conducting, and has always conducted, its
business in compliance with all applicable Laws, Consents, Permits
and recommendations from Governmental Authorities, subject to
irregularities that have no material adverse effect on the Company.
(b) The Company possesses all Consents and Permits required in
connection with its operations as currently conducted, and all such
Consents and Permits are in full force and effect, subject to
irregularities that have no material adverse effect on the Company.
There are no pending Proceedings to modify, suspend, terminate or
otherwise limit any such Consent or Permit that would have a
material adverse effect on the Company.
(c) A situation or practice by or involving the Company that is not in
strict compliance with all applicable Laws, Consents, Permits or
recommendations from Governmental Authorities, shall not constitute
a breach of the representation and warranty given in this Section
3.6, if the competent Governmental Authorities have accepted and/or
tolerated such situation or practice with full knowledge of all
facts and circumstances relevant to such non-compliance.
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3.7. Accounting and Financial Documents.
(a) ANNEX 3.7(a) contains complete and correct copies of the audited
annual financial statements of the Company (balance sheet, profit
and loss statement, cash flow statement and notes on the accounts
(including off-balance sheet undertakings)), including the report
and opinion of the independent auditor of the Company, as of and for
the period ended December 31, 2001, prepared in accordance with
Dutch GAAP (the "2001 FINANCIAL STATEMENTS").
(b) ANNEX 3.7(b) contains complete and correct copies of the unaudited
financial statements of the Company (balance sheet, profit and loss
statement and notes on the accounts (including off-balance sheet
undertakings)) as of and for the period ended September 30, 2002,
prepared in accordance with Dutch GAAP and including a comparison to
the comparable period ended September 30, 2001 (the "2002 FINANCIAL
STATEMENTS"; together with the 2001 Financial Statements, the
"FINANCIAL STATEMENTS").
(c) The Financial Statements give a true and accurate account of the
financial condition, assets, liabilities and results of operations
of the Company as of the respective dates thereof and for the
periods then ended. The 2001 Financial Statements have been
certified without qualification by the independent auditor of the
Company.
(d) ANNEX 3.7(d) contains complete and correct copies of the unaudited
financial statements of Crystal (balance sheet, profit and loss
statement and cash flow statement) as of and for the period ended
September 30, 2002, prepared in accordance with Dutch GAAP. Subject
to customary year-end adjustments, such financial statements give a
true and accurate account of the financial condition, assets,
liabilities and results of operations of Crystal as of the date
thereof and for the period then ended.
3.8. Conduct of business. To the Seller's best knowledge, since September 30,
2002, except as specifically contemplated herein or as indicated in ANNEX
3.8:
(a) Each of the Company and Crystal has carried out its activities
solely within the Ordinary Course of Business, using all reasonable
efforts in accordance with past practice to (i) preserve the
organization and value of its business, its goodwill and reputation,
its relationships with clients, suppliers, customers, agents, public
authorities and any other parties having business dealings with it,
(ii) keep available the services of its employees, (iii) maintain
all assets and properties in work-
8
ing condition, and (iv) comply in all material respects with all
contractual and other obligations applicable to its business.
(b) The Company has not terminated any business relationship that could
materially affect its condition, financial or otherwise, or
prospects;
(c) The Company has not undertaken any transaction materially modifying
the substance of, or the rights over, its assets, such as any
transfer, pledge, lease, grant of license or other rights to third
parties with respect to its tangible or intangible assets, except
for transactions that were entered into in the Ordinary Course of
Business (excluding real estate transactions between or among the
Company, Crystal, the Seller and the Seller's Affiliates);
(d) The Company has not declared any dividends or made any other
distribution of profits, reserves or retained earnings;
(e) The Company has not incurred or become subject to any Liability or
entered into any transaction that is outside the Ordinary Course of
Business and that could materially affect its condition, financial
or otherwise, or prospects;
(f) The Company has not accelerated the collection of, granted any
discounts (other than in the Ordinary Course of Business) with
respect to, or sold to third parties, any accounts receivable
related to the Company, or delayed the payment of any payables
related to the Company or any portion thereof;
(g) The Company has not changed the collective status of its employees
as described in ANNEX 3.18(b), nor has it granted any additional
benefit to any of its directors, consultants or employees, with the
exception of compulsory salary increases made pursuant to the terms
of the applicable collective bargaining agreement;
(h) The Company has not agreed to any merger, de-merger, spin-off or
consolidation; changed its share capital, issued any securities of
any nature whatsoever (including warrants), granted any stock
options, or purchased any of its own securities;
(i) No amendments have been made to the organizational documents
(including articles of association and by-laws) of the Company;
(j) The Company has not made any change in its accounting procedures or
practices;
(k) The Company has not made any capital expenditures in excess of Euro
1,250,000 (or its equivalent in any other currency), nor has it
committed to purchase orders or otherwise assumed liability for a
capital expenditure of Euro 250,000 individually or
9
Euro 500,000 in the aggregate (or the equivalent thereof in each
case in any other currency) which remains an obligation of the
Company on the date hereof;
(l) No material modifications to any Contract or other arrangement
between the Company and the Seller or its Affiliates have been made,
other than as specifically envisioned under this Agreement;
(m) The Company has not, except in the Ordinary Course of Business, (i)
varied the terms of any existing indebtedness or guarantee; (ii)
subjected any of its properties or other assets to any Encumbrance
other than Permitted Encumbrances; (iii) discharged or satisfied any
Encumbrance or paid or satisfied any Liability; (iv) cancelled,
compromised, settled or otherwise adjusted any debt, claim or
Proceeding or waived or released any right relating to its business;
or (v) sold, assigned, transferred or otherwise disposed of any
assets; and
(n) The Company has not agreed to do any of the foregoing.
3.9. Real Property.
(a) ANNEX 3.9(a) sets out a complete and accurate list of real property
owned by the Company. The Company has good and valid title to all
such property, free and clear of all Encumbrances, except for
Permitted Encumbrances and except as envisioned under the agreement
or agreements to be entered into among the Company, the Seller and
Crystal pursuant to Section 5.7.
(b) Upon the implementation of the arrangements set out in Section 5.7,
each of the Company and Crystal will have a valid and subsisting
right to use all parcels of real estate currently used (but not
owned) by it, in each instance free and clear of all Encumbrances
other than Permitted Encumbrances. Other than the parcels falling
under the arrangements set out in Section 5.7, and except as set out
in ANNEX 3.9(b), neither the Company nor Crystal leases or uses any
real property not owned by it.
(c) There are no pending zoning, condemnation or expropriation
Proceedings of which the Company is aware that would preclude or
materially impair the use of any property owned, leased or used by
the Company or Crystal.
(d) The buildings and other facilities or installations owned by the
Company are not built or situated on land not owned by the Company,
except to the extent such buildings or other facilities or
installations are built or situated on the parcels of land that are
the subject of the arrangements set out in Section 5.7(a).
10
3.10. Movable Property and Businesses. To the Seller's best knowledge, except
as set out in ANNEX 3.10, and upon implementation of the arrangements
referred to in Section 5.7(d), the Company either owns free and clear of
all Encumbrances other than Permitted Encumbrances, or uses under the
terms of a valid lease or finance lease, all movable property, machinery
and equipment that it uses.
3.11. Intellectual Property Rights. To the Seller's best knowledge:
(a) ANNEX 3.11(a) sets out a complete and accurate list of all
Intellectual Property Rights that the Company owns. Except as set
out in ANNEX 3.11(a), (i) all such Intellectual Property Rights are
valid and free from any Encumbrances; (ii) the Company has made all
filings, payments and formalities necessary to ensure its full and
exclusive ownership of such Intellectual Property Rights,
enforceable against third parties; and (iii) no license or right to
use of any of the Intellectual Property Rights set out therein has
been granted.
(b) ANNEX 3.11(b) sets out a complete and accurate list of all
Intellectual Property Rights that the Company uses under license,
including an indication of which such licenses will terminate or
will require renewal as a result of the Transaction.
(c) Except as set out in ANNEX 3.11(b), the Company is not infringing
and has not infringed, and is not participating and has not
participated in any infringement of, any Intellectual Property
Rights of any other Person. Except as set out in ANNEX 3.11(b),
there are no pending adverse claims with respect to any Intellectual
Property Rights, either owned or licensed.
(d) Crystal validly uses the trade name "Royal Leerdam Crystal", as
currently used, free from any Encumbrances. No license or right to
use such trade name has been granted, and there are no pending
adverse claims with respect to such trade name.
3.12. Indebtedness.
(a) The Company has no Indebtedness, except for the Debt. The Seller has
valid ownership of the Debt, free and clear of all Encumbrances. All
interest on the Debt through and including December 27, 2002, has
either been paid or is included in the amount of the Debt.
(b) Crystal has no Indebtedness, except for the Crystal Debt. BSN
Glasspack Finance has valid ownership of the Crystal Debt, free and
clear of all Encumbrances. All interest on the Crystal Debt through
and including December 27, 2002, has either been paid or is included
in the amount of the Crystal Debt.
11
3.13. Receivables. To the Seller's best knowledge, all accounts receivable set
out in the Financial Statements and all other rights of payment,
including, without limitation, unbilled amounts and credits extended to
third parties acquired by the Company between September 30, 2002, and the
date hereof, have arisen from bona fide transactions in the Ordinary
Course of Business, are free from any Encumbrances, and the reserves or
write-offs for bad debts in the Financial Statements have been computed
in a manner consistent with past practice.
3.14. Contracts. To the Seller's best knowledge, ANNEX 3.14 sets out a complete
and accurate list of all Contracts (setting forth an indication of the
purpose of the contract, the names of the parties thereto, and its
execution date), other than Contracts solely between or among the
Company, Crystal, the Seller and/or the Seller's Affiliates and Contracts
that this Agreement contemplates will be executed in connection with the
Transaction, falling under any of the following categories:
(a) Contracts (including customer contracts and groups of contracts
related to the same subject matter) involving the Company's
obligation to pay, or entitlement to receive, under the normal
course of such Contracts, a total amount in excess of Euro 250,000,
or the equivalent thereof in any other currency, calculated on the
date hereof;
(b) Contracts, the term of which exceeds one year or is unlimited in
duration (with the exception of labor agreements), that the Company
may not terminate on less than six months' notice without payment of
an indemnity, and that involve the Company's obligation to pay, or
entitlement to receive, under the normal course of such Contracts, a
total amount in excess of Euro 50,000, or the equivalent thereof in
any other currency, calculated on the date hereof;
(c) Contracts giving rise to the payment by the Company of finder's fees
to the other party (or to any entity or individual connected
therewith) in consideration for business referred to the Company by
such party;
(d) Contracts providing for the sharing of profits, the payment of
commissions, or the payment of any amounts based on profits or
revenues;
(e) Contracts under which the Company is bound to refrain from competing
or otherwise restricting the Company's ability to compete in its
market;
(f) Contracts granting exclusive rights, other than exclusive
arrangements with suppliers of goods or services not related to the
Company's core commercial activities;
12
(g) Any outstanding loans granted by the Company;
(h) Guarantees, sureties, warranties and credit support agreements given
by (i) the Seller or its Affiliates for the benefit of the Company
(except for those that will be terminated or otherwise come to an
end upon the consummation of the Transaction); or (ii) the Company,
other than guarantees as to product performance or prepayments
received, guarantees given in the Ordinary Course of Business, or
guarantees to secure utility purchases or rental payments, but
including such guarantees if to or for the benefit of the Seller or
its Affiliates; and
(i) Contracts relating to the holding and/or transfer of securities or
interest in any entity or to the control or management thereof.
To the Seller's best knowledge, all such Contracts, together with all
other contractual relationships falling within the scope of any
representation or warranty set forth in this Article 3, are valid and
binding and in full force and effect, and enforceable in accordance with
their terms. To the Seller's best knowledge, the Company is not in breach
of any such Contract and has not waived any right under any such Contract
that could have a material adverse effect on the Company, and the Company
has not received any notice of breach, default, acceleration or transfer
under any such Contract. To the Seller's best knowledge, no other party
to any Contract is in default thereunder. To the Seller's best knowledge,
except as set out in ANNEX 3.14, all Persons that have entered into any
such Contract entitling them to terminate such Contract or accelerate
performance thereunder in the event of a change of control of the Company
have waived such right in writing in connection with the Transaction.
3.15. Cancellation of related-party contracts and satisfaction of debts. Except
as specifically envisioned by this Agreement and except for the Debt and
the Crystal Debt, the Seller has:
(a) repaid or procured the repayment to or by the Company or Crystal of
any debt owed to or by the Company or Crystal (including, without
limitation, amounts outstanding under any loans granted by or to the
Company or Crystal) by or to any of the Seller, its Affiliates or
any Related Person thereof, including all interest thereon, without
any penalty for prepayment, with the exception of those debts that
would have arisen from bona fide transactions between the Company,
Crystal the Seller and/or its Affiliates in the Ordinary Course of
Business and the payment of which would not have been delayed;
13
(b) terminated or procured the termination of, without any penalty or
payment by, or Liability to, the Company or Crystal, all Contracts
between any of the Seller, its Affiliates or any Related Person
thereof, on the one hand, and the Company and/or Crystal, on the
other hand (including, without limitation, arrangements for any
services to be provided to the Company and/or Crystal by the Seller
or its Affiliates other than pursuant to the Service Agreement to be
entered into pursuant to Section 5.6), except for the foreign
exchange contract entered into between the Company and BSN Glasspack
Finance attached hereto as ANNEX 3.15(b), the benefits of which will
remain fully available to the Company through December 31, 2003; and
(c) procured the full release, without any Liability to the Company or
Crystal, effective as of the date hereof, of all past, present or
future guarantor obligations of the Company and Crystal, in any form
whatsoever, including as joint and several obligor, that benefit any
of the Seller, its Affiliates or any Related Person thereof.
3.16. Subsidies. To the Seller's best knowledge, ANNEX 3.16 sets out a complete
and accurate list of all Subsidies that (i) either impose on the Company
any obligations or conditions that remain in effect as of the date hereof
or that will come into effect hereafter or (ii) provide for future
benefits, setting out the status of each Subsidy, including the benefits
thereof and any obligations or conditions imposed on the Company. To the
Seller's best knowledge, except as set out in ANNEX 3.16, the Company is
not in breach of any of the terms and conditions of any Subsidy.
3.17. [intentionally omitted]
3.18. Employment Matters. To the Seller's best knowledge:
(a) Except as set out in ANNEX 3.18(a), there are no current or pending
collective or individual labor disputes with the employees of the
Company which may materially affect the Company's condition,
financial or otherwise, or prospects.
(b) ANNEX 3.18(b) sets out, for the Company and, where applicable, for
each separate branch or facility:
(i) all applicable collective bargaining agreements;
(ii) the compensation scheme, including premiums, bonuses,
commissions, fringe benefits, applicable to all of the
employees or certain categories thereof; and
14
(iii) the profit-sharing, incentive, stock-options, company savings
and other similar plans.
(c) ANNEX 3.18(c) sets out a list of all employees of the Company and of
Crystal as of the date hereof, together with their annual
compensation, date of hire and length of service.
(d) ANNEX 3.18(d) sets out (i) copies of model employment agreements as
entered into by the Company, and (ii) copies of all agreements under
which certain employees or corporate officers enjoy benefits, the
value of which would exceed by at least Euro 10,000 the value of
those arising from the collective status referred to in Section
3.18(b) or the model agreements attached hereto (including, without
limitation, increased severance pay, extended notice periods, fringe
benefits, and pensions), together with a list of the names of the
beneficiaries of such agreements and the nature of the exceptional
benefits granted.
(e) There are no existing undertakings or obligations of the Company, or
by which it is bound, vis-a-vis former employees or corporate
officers of the Company.
(f) The Company has no obligations vis-a-vis bodies representing its
employees exceeding those provided for by applicable Law or the
collective status referred to in Section 3.18(b).
(g) Except as set out in ANNEX 3.18(g), no pending claim has been made
against the Company by any relevant authority for failure to comply
with labor rules and regulations that is not fully and finally
settled.
(h) Neither the Seller nor the Company has undertaken to grant any
benefits to any employees or corporate officers of the Company as a
result of the completion of the Transaction.
(i) The Company has not made any commitment in connection with any
Social plan which has not been performed, nor has the Company made
any written commitment in connection with any future collective
dismissal or reorganization, except for irregularities that have no
material adverse effect on the Company.
(j) The Company is and has complied with all provisions of labor and
Social Laws, the collective status described in Section 3.18(b), and
individual employment contracts, except for irregularities that,
individually or in the aggregate, have no material adverse effect on
the Company.
15
(k) No senior executive of the Company has declared in writing his or
her intention to resign, and no senior executive of the Company has
resigned since the date three months before the date hereof.
3.19. Pension and Other Employee Benefit Matters.
(a) ANNEX 3.19(a) sets out a complete and accurate list of all pension,
pre-pension, health, disability and other employee benefit
commitments of the Company and Crystal and all payment obligations
of the Company and Crystal in connection with such commitments.
(b) The BSN Plan, a copy of which is attached as ANNEX 3.19(b), is the
only collective and/or individual pension scheme to which the
Company and Crystal are obligated to make any contribution or
otherwise fulfill any commitment. The BSN Plan was implemented
before June 1, 1999, and has not been altered in any material
respect since June 1, 1999, other than as required by applicable
Law.
(c) Since the last date on which the pensionable salaries of employees
of the Company and Crystal were determined, neither Company nor
Crystal has granted, committed to or agreed to any salary increases
or other adjustments to pensionable salaries that will or could
result in back service or future service payment obligations other
than as provided in the applicable collective bargaining agreements
disclosed in ANNEX 3.18(b) for employees falling under the
provisions of the applicable collective bargaining agreements.
(d) The BSN Plan and former collective and individual pension, health,
disability or similar schemes of the Company or Crystal or
applicable to the Company's or Crystal's employees (each a "FORMER
PLAN") are and have been in material compliance with applicable Law,
except for irregularities that have no material adverse effect on
the Company, Crystal, the BSN Plan or Former Plan, as appropriate.
(e) All contributions due to the BSN Plan under applicable contract or
Law are and have been made in full, and all other obligations to the
BSN Plan arising under applicable contract or Law (including
back-service payments) have been satisfied, in a timely manner, to
the extent required by applicable Law.
(f) No Person has granted a waiver of participation in the BSN Plan with
respect to any of the Company's or Crystal's employees.
16
(g) There are no current or pending Proceedings regarding the BSN Plan
or any Former Plan, or the implementation thereof, and to the
Seller's best knowledge, no such Proceedings have been threatened in
writing.
3.20. Tax, Social Security, Customs.
(a) Each of the Company and Crystal has timely filed true, accurate and
complete Tax and Social reports, returns and notices as required by
applicable Laws, has withheld from its employees and timely paid to
the appropriate Governmental Authority proper and accurate amounts
for all periods through the date hereof as required by applicable
Tax withholding provisions of applicable Laws, and has otherwise
complied with all applicable Tax and Social Laws.
(b) Each of the Company and Crystal has timely paid all Taxes and Social
Charges that became due before the date hereof. Each of the Company
and Crystal has fully, duly and timely paid all corporate income
taxes due on its share of the taxable profits of the current fiscal
unity among the Company, Crystal, the Seller and certain of the
Seller's Affiliates (the "FISCAL UNITY") for Dutch corporate income
tax purposes (vennootschapsbelasting). The Seller has repaid, or
caused the repayment of, all advances made by the Company or Crystal
to other members of the Fiscal Unity for Taxes with respect to the
fiscal year 2002.
(c) Except as set forth in ANNEX 3.20(c), to the Seller's best
knowledge, (i) none of the Company, Crystal, the Seller and the
Seller's Affiliates has received any written information request,
notice of initiation of an audit or inquiry or similar written
notice from any Tax or Social authorities or bodies relating to any
Taxes for which the Company or Crystal is or may be liable, and (ii)
no such audit or inquiry has been initiated.
(d) Neither the Company nor Crystal enjoys or has enjoyed any Tax or
Social benefit, favorable regime or Consent in consideration for or
subject to undertakings or obligations by which either of them is
still bound. Neither the Company nor Crystal owns any asset (i) the
tax value of which is materially less than its net book value, (ii)
which is subject to any holding obligation, or (iii) to which any
latent or contingent Tax or Social Liability not shown in the
Financial Statements is attached. The information provided and the
representations made to the Tax or Social authorities by the Company
or Crystal in connection with the obtaining of any Tax or Social
benefits, favorable regimes or Consents enjoyed by it were true,
accurate and complete. The profit-sharing, incentive, stock-options,
company sav-
17
ings and other similar plans enjoyed by the Company's and
Crystal's employees qualify for the Tax and Social exemptions
normally applicable to them.
(e) To the Seller's best knowledge, and except as indicated in ANNEX
3.20(e), neither the Company nor Crystal will incur any Tax burden
as a result of the termination, subsequent to or as a result of the
sale of the Shares or otherwise as a result of the Transaction, of
any fiscal unity regime applicable to it.
(f) Neither the Company nor Crystal is entitled to any corporate income
Tax receivables.
(g) A complete and accurate list of the Tax elections made by the
Company and Crystal (including, but not limited to, elections
related to fiscal unity regimes for corporate income tax and V.A.T.)
is attached as ANNEX 3.20(g), together with copies of the fiscal
unity decree (beschikking) for corporate income tax purposes and the
fiscal unity decree for V.A.T. purposes.
(h) Except as a result of the fiscal unity election and the fiscal unity
degree set out in ANNEX 3.20(g), neither the Company nor Crystal has
assumed or is bound to assume the Tax Liabilities of any other
Person or to indemnify such Person for such Tax Liabilities other
than as required by applicable Law.
3.21. Litigation. Except as set out in ANNEX 3.21, there are no current or
pending Proceedings to which the Company is a party or in which the
Company is otherwise involved, and to the Seller's best knowledge, no
such Proceedings have been threatened in writing. There are no Judgments
in force or outstanding against the Company that impose ongoing or future
obligations on the Company.
3.22. Product Liability. To the Seller's best knowledge, the Company has not
been ordered or requested by any governmental or judicial authority, or
by any professional or consumer body whatsoever, to recall any product
manufactured or marketed by it, or to inform the users thereof of the
existence of any defect in any such product or danger caused by, or
related to, its use.
3.23. Bank Accounts and Signature Powers. To the Seller's best knowledge, ANNEX
3.23 sets out a complete and accurate list of the bank accounts and safe
deposit boxes opened in the name of the Company, with the names of the
persons authorized to operate such accounts or to have access to such
deposit boxes, as well as a list of all of the powers of attorney granted
by the Company with a description of the powers thus granted, their term
and the positions occupied by the persons to whom they have been granted.
18
3.24. Intermediaries. All negotiations relating to this Agreement have been
carried out without the involvement of any person acting on behalf of the
Seller or the Company in a manner that could give rise to any valid claim
against the Company or the Purchaser for any broker's or finder's fee or
similar compensation in connection with the transactions contemplated
hereby.
3.25. Completeness of Representations and Warranties. The Seller has not
omitted to disclose to the Purchaser any facts of which the Seller has
knowledge that would be necessary to make the information contained in
this Agreement and its annexes, taken as a whole, not misleading.
3.26. Seller's knowledge. Where the above representations and warranties are
subject to the Seller's knowledge, the Seller's knowledge shall mean (i)
the Seller's actual knowledge; (ii) knowledge of the Company, Crystal and
their businesses that a reasonably prudent Person wholly owning companies
of a comparable size and type has; (iii) knowledge that the Seller, using
reasonably diligent efforts to obtain from the Company and Crystal all
relevant information, would have; and (iv) knowledge that the Seller
could reasonably be expected to have in its capacity as a co-owner and
co-operator of the site at Leerdam.
ARTICLE 4
COVENANTS OF THE PURCHASER
4.1. Best efforts undertaking. In case any further action is necessary or
desirable to carry out the purposes of this Agreement, the Purchaser
shall use its best efforts to take or cause to be taken any such action.
4.2. Confidentiality. For three years following the date hereof, the Purchaser
shall refrain, and shall cause its Affiliates to refrain, from using in
the manufacture of glass packaging (glass containers) or providing any
third party (except for its advisors and bankers) any Confidential
Information about the Seller or its Affiliates obtained in the course of
negotiating the Transaction, other than as required by applicable Law or
to enforce its rights under this Agreement.
4.3. Non-solicitation. For two years following the date hereof, the Purchaser
shall not employ or solicit for employment, either directly or
indirectly, management employees of the Seller (except for such employees
whose employment has been terminated by the Seller and for a cause not
pertaining to the employees concerned), or incite any of those employees
to leave any position they occupy now or in the future with the Seller.
19
This prohibition shall not apply to advertisements placed in publications
in general circulation.
4.4. Transfer of cash.
(a) The Purchaser shall, within five Business Days after the date
hereof, cause the Company to transfer to the Seller the cash balance
credited on the bank accounts of the Company as of the close of
business on the Business Day preceding the date hereof, excluding
any amounts paid to the Company before the date hereof pursuant to
Section 3.20(b), in full repayment of the portion of the Debt not
transferred hereunder.
(b) The Purchaser shall, within five Business Days after the date
hereof, cause Crystal to transfer to BSN Glasspack Finance the cash
balance credited on the bank accounts of Crystal as of the close of
business on the Business Day preceding the date hereof, excluding
any amounts paid to Crystal pursuant to Section 3.20(b) before the
date hereof, in partial repayment of the Crystal Debt.
4.5. Cooperation in limiting application of fiscal unity anti-abuse rules. A
copy of the request filed by the Fiscal Unity with the Dutch Tax
authorities on behalf of the VG Holding B.V. (the parent of the Seller),
the Company and Crystal to apply the Resolution of the Dutch
Underminister of Finance dated February 15, 2002 (nr. CPP 2001/3580) in
the event that the Dutch Tax authorities or a court in the final instance
decide(s) that one or more transactions have occurred that will give rise
to an additional Tax assessment imposed on the Seller according to
Article 15 of the Corporation Tax Act 1969 and the 16th standard
condition (Wet op de vennootschapsbelasting 1969, zestiende
standaardvoorwaarde) is attached as ANNEX 4.5. Such request is intended
to ensure that, where, pursuant to Article 15 of the Corporation Tax Act
1969 and the 16th standard condition, a transaction has occurred that
will give rise to an additional Tax assessment imposed on the Seller and
its Affiliates, such additional Tax assessment is limited to only those
particular assets that have been transferred between the Seller, its
Affiliates, the Company and Crystal under the aforementioned
transactions. In the event such assets cannot be identified, the
Purchaser shall cooperate with the Seller to take such additional steps
as are reasonably required to cause the fiscal unity anti-abuse rule to
be limited to assets that have been transferred between the Seller, its
Affiliate, the Company and Crystal under the aforementioned transactions.
4.6. Distribution agreements. The Purchaser acknowledges that the Company has
entered into agreements with Luigi Bormioli Corporation regarding the
distribution of the Company's products in the United States and Canada,
and with Royal Doulton Canada
20
regarding the distribution of the Company's products in Canada. In
addition to the payment of the Purchase Price, the Purchaser acknowledges
and accepts all responsibility, expense and associated costs in the event
that such agreements are terminated as contemplated by the Purchaser as a
fundamental premise for its entering into the Transaction. The Purchaser
acknowledges that the Seller shall not bear any responsibility for any
such expenses and costs, whether incurred by the Purchaser or the
Company. The Purchaser hereby waives any rights of rescission,
cancellation and similar rights under Belgian law that it may have with
respect to this Agreement arising out of the cancellation of such
distribution agreements.
ARTICLE 5
COVENANTS OF THE SELLER
5.1. Best efforts undertaking. In case any further action is necessary or
desirable to carry out the purposes of this Agreement, the Seller shall
use its best efforts to take or cause to be taken any such action.
5.2. Confidentiality. For three years following the date hereof, the Seller
shall refrain, and shall cause its Affiliates to refrain, from using in
the manufacture of glass tableware or providing any third party (except
for its advisors and bankers) any Confidential Information about the
Purchaser, its Affiliates, the Company or Crystal obtained in the course
of negotiating the Transaction, other than as required by applicable Law
or to enforce its rights under this Agreement.
5.3. Non-competition and non-solicitation.
(a) For three years following the date hereof, the Seller shall not
(except as permitted by Section 5.3(b)) undertake, directly or
indirectly, personally or through other individuals or entities,
whether or not for compensation, throughout the world, any activity
that might compete with the Company and/or Crystal.
(b) The Seller shall be entitled to purchase equity interests or assets
of a third party that would otherwise result in a breach of Section
5.3(a), provided that (i) the portion of the business so acquired
that competes with the Company and/or Crystal (the "COMPETING
BUSINESS") had an average annual turnover for the three years
preceding such acquisition of no more thanEuro30 million; and (ii)
the Competing Business represented no more than 25% of the average
annual turnover of the acquired business as a whole for the three
years preceding such acquisition. Promptly following the acquisition
of any Competing Business authorized hereunder, the Seller shall
grant the Purchaser an option, to remain available for
21
25 Business Days, to purchase the Competing Business in cash at fair
market value, as determined by an investment banker of international
repute selected by the Seller. If the Purchaser does not exercise
such option within 25 Business Days of the Purchaser's receipt of
the option, the Seller shall use its best efforts to sell the
Competing Business to a third party within six months of the
consummation of the Seller's acquisition of the Competing Business.
Before agreeing to any sale of the Competing Business for a price
less than that determined by the investment banker pursuant to this
section, the Seller shall offer the Competing Business to the
Purchaser for such price. If the Purchaser does not accept such
offer within 25 Business Days of its receipt of such offer, the
Seller may proceed with the sale to a third party; provided,
however, that if the sale to the third party is not consummated
within six months after the Purchaser's rejection of such offer, the
procedure contemplated in the preceding sentence shall be applicable
before any sale can be made. For the avoidance of doubt, the
procedures set out in this Section 5.3(b) shall apply to any
Competing Business acquired within the three-year period referred to
in Section 5.3(a), regardless of whether such procedures extend
beyond such three-year period.
(c) For two years following the date hereof, the Seller shall not employ
or solicit for employment, either directly or indirectly, management
employees of the Company or Crystal (except for such employees whose
employment has been terminated by the Company or Crystal and for a
cause not pertaining to the employees concerned), or incite any of
those employees to leave any position they occupy now or in the
future with the Company or Crystal. This prohibition shall not apply
to advertisements placed in publications in general circulation.
5.4. Pension Matters.
(a) As of the date hereof, the coverage of the Eligible Employees for
the benefits provided through the BSN Fund Foundation shall
terminate, without prejudice to any rights under the BSN Plan and
under this Agreement.
(b) As soon as reasonably practicable after the date hereof, the
Purchaser shall establish a defined benefit plan providing the
Eligible Employees with benefits comparable to those granted under
the BSN Plan (the "PURCHASER'S PLAN") by implementing such actions
as might be required to that effect, including (i) the incorporation
of a foundation (stichting) (the "RL PENSION FOUNDATION") as
referred to in Section 2.1(b) of the Dutch Pensions Act, (ii) the
establishment of pension regulations (a pensioenreglement) in
accordance with the Dutch Pensions Act, and (iii) the execution of
an agreement between the RL Pension Foundation and the Com-
22
pany and Crystal, as appropriate, as referred to in Section 3a of
the Dutch Pensions Act.
(c) (i) The Seller shall seek to have the BSN Fund Foundation establish
as of the Reference Date on its books and records (without having to
segregate any actual assets) a separate account (the "Account"), to
which shall be credited:
(A) an amount of assets (reflecting proportionally the combination
of total fixed income and non-fixed income assets managed by
the BSN Fund Foundation as of the Reference Date) equal to one
hundred and five percent (105%) of the aggregate value of the
vested and accrued pension obligations as of the Reference Date
with respect to Eligible Employees (excluding the effect of any
increase in their salaries for 2003) under (x) the Standard
Plan, calculated in accordance with Sections 18.2 and 18.3 of
the Standard Plan Regulations and based on the employment
status and credited service at the Reference Date and using
pensionable earnings based on the actual salary at the
Reference Date; and (y) the TOP Plan, calculated in accordance
with Section 12.3 of the TOP Plan Regulations, and, with
respect to Eligible Employees who are covered by the
transitional rules under Section 15 of the TOP Plan, calculated
on the basis of an assumed TOP retirement age of 60 or 62, as
the case may be, using the accrual rates set forth in Sections
15.3 and 15.4 of the TOP Plan Regulations, and in all cases
calculated based on the employment status, salary (for the
determination of pensionable earnings) and credited service
from April 1, 1998, as set forth in Sections 15.3 and 15.4 of
the TOP Plan, of Eligible Employees as of the Reference Date
and, unless otherwise provided herein, in accordance with the
actuarial assumptions set forth in the ABTN, a copy of which is
attached as ANNEX 5.4(c); and
(B) an amount equal to the portion of the Premium Deposit
outstanding on the Reference Date equal to the ratio between
the sum of the value of the TOP benefits for each Eligible
Employee projected to their early retirement age (less the TOP
benefits taken into account in paragraph (A) above and
excluding the TOP benefits accruing at 2 and 15/35%, 2 and
11/37% or 2 and 6/37%, as applicable, per year of service from
the Reference Date onwards) relative to the sum of the value of
the TOP benefits for each active employee covered under the BSN
Plan (including the Eligible Employees) projected to their
early retirement age
23
(less the TOP benefits as would be determined under paragraph
(A) above and excluding the TOP benefits accruing at 2 and
15/35%, 2 and 11/37% or 2 and 6/37%, as applicable, per year of
service from the Reference Date onwards), both determined in
accordance with the actuarial assumptions set forth in the
ABTN.
the aggregate amount calculated in accordance with (A) and
(B) above being subject to adjustment as provided below.
(ii) At any time between the Reference Date and the date seven
Business Days before the Pension Transfer Date, the Purchaser
may elect to convert all or any portion of the assets
credited to the Account into cash, with the understanding
that the cash proceeds from sale of the investments will be
promptly reinvested in high quality short-term interest
bearing government debt. Upon receipt of a written notice
from the Purchaser electing such cash conversion, the Seller
shall seek to have the BSN Plan convert the assets credited
to the Account (or the designated portion thereof) into cash,
in accordance with reasonable instructions as to the assets
to be converted. If the assets credited to the Account as of
the Reference Date have not been definitively ascertained at
the time of such election, the Seller shall seek to have the
BSN Plan (x) convert assets representing up to 70% (unless
otherwise agreed) of the reasonably estimated value of the
non-cash assets credited to the Account into cash, and (y) as
soon as the amount of assets to be credited to the Account as
of the Reference Date is definitively ascertained, convert
the remainder of such assets into cash, in each case to the
extent requested by the Purchaser and crediting the resulting
cash to the Account. The Seller shall seek to have the BSN
Plan convert such assets to cash within seven Business Days
after the Seller's receipt of written notice from the
Purchaser electing such conversion, on the basis of a
valuation of such assets made at the time of such conversion
to cash, it being understood that the Purchaser and the BSN
Fund shall not be responsible for fluctuations in the
valuation of such assets between the Reference Date and the
date of conversion of such assets, without prejudice to the
Purchaser's rights in the event that such assets are not
converted in a timely manner in accordance with this Section
5.4(c)(ii).
(iii) From the Reference Date through the Pension Transfer Date,
the amount credited to the Account shall be:
24
(A) reduced by the amount of any benefit payments made to or in respect
of any Eligible Employee who is entitled to such benefits under the
BSN Plan, and who elects to transfer his or her accrued benefits to
the RL Pension Foundation;
(B) reduced by the value of any benefits transferred to another pension
plan or insurance company before the Pension Transfer Date at the
request of an Eligible Employee, following the termination of such
Eligible Employee's service with the Company or Crystal; and
(C) increased or reduced, as the case may be, on a monthly basis and on
the Pension Transfer Date to reflect (x) if the Purchaser has not
elected to convert any of the assets credited to the Account to
cash, the time-weighted investment return on each category of assets
credited to the Account from time to time over that period; and (y)
if the Purchaser elects to convert some or all of the assets
credited to the Account to cash, the time-weighted investment return
on each category of assets credited to the Account and not converted
to cash from time to time over that period, and an investment return
on the cash credited to the Account at a rate per annum equal to the
actual return on the high quality short-term interest bearing
government debt in which such cash is to be invested pursuant to
Section 5.4(c)(ii).
(d) On a day following the fulfillment of all conditions necessary to
complete the transfer of assets and assumption of liabilities
contemplated by this Section 5.4(d), including the granting of a
consent by the PVK to such transfer, on which the Purchaser and the
Seller may agree, or in the absence of such agreement 10 Business
Days after the fulfillment of such conditions, (the "PENSION
TRANSFER DATE"):
(i) the Seller shall seek to have the BSN Fund Foundation transfer
to the RL Pension Foundation (x) if the Purchaser has elected
to convert some or all the assets in the Account to cash
pursuant to Section 5.4(c)(ii), an amount in cash equal to the
cash balance of the Account attributable to such converted
assets as of the Pension Transfer Date; and (y) with respect to
assets that the Purchaser has not elected to convert in the
Account to cash pursuant to Section 5.4(c)(ii), assets credited
to the Account and valued as of the Pension Transfer Date; and
(ii) the Purchaser shall cause the RL Pension Foundation to assume
from the BSN Fund Foundation, in consideration for the cash or
assets transferred to
25
it pursuant to Section 5.4(d)(i), liabilities equal to the
accrued benefits allocable to all Eligible Employees who are
participants in the BSN Plan as of the Pension Transfer Date
and who have consented to the transfer of their benefits
pursuant to Section 5.4(i).
If the assets and/or cash transferred to the RL Pension Foundation
on the Pension Transfer Date are insufficient to meet the funding
requirements of the RL Pension Foundation, the Seller shall not, in
the absence of any breach of this Agreement and without prejudice
to Section 5.4(g), be liable for such shortfall.
(e) The Seller shall procure that all required filings and submissions
to the PVK and other appropriate Governmental Authorities be made,
and that all necessary amendments to the BSN Plan, the relevant
provisions in the related pension regulations and the related
agreement with the Seller are made, as may be required in connection
with the contemplated transfer of cash or assets (including the
establishment and operation of the Account and transfers to and from
the Account) and assumption of liabilities described herein.
(f) Within the later of 60 days after obtaining all required approvals
and 30 days after being notified of the establishment of the RL
Pension Foundation, the Purchaser shall notify or procure that the
RL Pension Foundation notifies the Eligible Employees (except for
those referred to in Section 5.4(k)) in a legally appropriate manner
of their right to transfer from the BSN Fund Foundation to the RL
Pension Foundation of all their benefits accrued in the BSN Fund
Foundation, the consequences of such transfer (including a reference
to a waiver of all claims against the BSN Fund Foundation) and the
consequences of not transferring.
(g) If and to the extent that the PVK or the BSN Fund Foundation does
not approve the transfer of the cash or assets contemplated to be
transferred pursuant to Section 5.4(d)(i), or is otherwise limited
or restricted to do so, the excess of the amount required to be
transferred over the amount permitted to be transferred shall be
paid by the Seller to the Purchaser in cash on the Pension Transfer
Date, in a manner that will secure for such amount the same tax
treatment as the tax treatment enjoyed by the cash or assets
transferred pursuant to Section 5.4(d)(i). If the BSN Fund
Foundation does not take any other action requested by the Seller
pursuant to its obligations hereunder, the Seller shall place the
Purchaser and the RL Pension Foundation in the position they would
have been in had the BSN Fund Foundation taken such action. The
Parties shall meet and negotiate in good faith, and shall use their
best efforts to implement, any steps (including modifications to the
arrangements set out in this Section 5.4) reasonably necessary to
pro-
26
cure the approval and cooperation of the PVK and BSN Fund Foundation
and otherwise to implement this Section 5.4, it being understood
that such negotiations shall not result in a reduction of the amount
ultimately payable by the BSN Fund Foundation and/or the Seller to
the RL Pension Foundation and/or the Purchaser pursuant to Sections
5.4(d) and (g).
(h) The Purchaser shall bear all reasonable and customary costs
associated with the transfer of the assets and assumption of the
liabilities contemplated herein.
(i) If any Eligible Employee does not consent to the contemplated
transfer of his or her benefits accrued in the BSN Fund Foundation
to the RL Pension Foundation, such benefits shall continue to be met
by the BSN Fund Foundation and shall continue to be governed by the
terms and conditions of the BSN Plan. Eligible Employees who do not
transfer their accrued benefits to the RL Pension Foundation will be
treated as deferred vested plan members for purposes of Article 18
of the Standard Plan and Article 12 of the TOP Plan from the
Reference Date onwards. In this case, the amount credited to the
Account as of the Reference Date shall be reduced by the amount that
otherwise would be credited to the Account as of the Reference Date
with respect to such non-consenting Eligible Employees pursuant to
Section 5.4(c)(i)(A).
(j) From the date hereof until the Pension Transfer Date, the Seller
shall provide or shall seek to have the BSN Fund Foundation provide
to the Purchaser, the Company and Crystal all information and
documents concerning the Account or otherwise reasonably necessary
to ensure the effective transfer from the BSN Fund Foundation to the
RL Pension Foundation envisioned in this Section 5.4 or to
facilitate the Parties' compliance with their obligations hereunder.
(k) Notwithstanding any other provision of this Agreement, each of the
Company's and Crystal's employees listed in ANNEX 5.4(k) (which
includes all employees who, as of the date hereof, have been on sick
leave for a continuous period of at least three months), for so long
as such employee has not fully recovered and resumed their duties
with the Company or Crystal: (i) shall be considered to be a
non-consenting employee within the meaning of Section 5.4(i); and
(ii) shall remain fully covered by the BSN Plan, with the Seller or
an Affiliate thereof continuing to make all payments and
contributions required with respect to such employee's coverage
under the BSN Plan. If any such employee fully recovers and resumes
his or her duties with the Company or Crystal before becoming
permanently disabled, and if such employee consents to the transfer
of his or her benefits to the RL Pension Foundation: (x) if the
Account has not yet been paid to the
27
RL Pension Foundation, the employee shall no longer be considered a
non-consenting employee; or (y) if the Account has been paid to the
RL Pension Foundation, the Seller shall seek to procure the transfer
of such employee's benefits from the BSN Fund Foundation to the RL
Pension Foundation consistent with the principles of this Section
5.4 (including the obligation to transfer 105% of the value of such
employee's vested and accrued pension obligations pursuant to
Section 5.4(c)(i)(A)); provided, however, that the Reference Date
with respect to such employee shall be deemed to be the date on
which such employee has fully recovered and resumes his or her
active duties with the Company or Crystal.
(l) Notwithstanding any other provision of this Agreement, the Purchaser
shall not be entitled to make any claim based on the level of
provisions, deposits or contingent assets recorded or disclosed in
the Financial Statements in connection with pension and other
matters referred to in this Section 5.4, to the extent that the
Seller has complied with this Section 5.4.
5.5. Allocation of electricity.
(a) The Company and Crystal on the one hand, and the Seller and its
Affiliates on the other, shall be entitled to share pro rata in the
benefits of any investment in increased electricity capacity,
according to their respective share of the total cost of such
investment.
(b) In the event of any curtailment or rationing of electricity through
and including December 31, 2007, that would affect the Company
and/or Crystal, the Seller shall allocate to the Company and Crystal
continuously a percentage of electricity available to the Seller and
its Affiliates in Leerdam equal to the average amount of electricity
used by the Company and Crystal in 2001 and 2002, expressed as a
percentage of the total electricity used by the Seller, its
Affiliates, the Company and Crystal in Leerdam in 2001 and 2002;
provided, however, that any electricity made available during such
curtailment or rationing solely because of improvements in capacity
made after the date hereof shall be allocated according to Section
5.5(a).
5.6. Service Agreement. On the date hereof, the Seller shall enter into, and
shall cause the Company, to enter into, a service agreement, pursuant to
which the Seller will make available to the Company, and the Company will
make available to the Seller, certain operation, management and
procurement services, in the form attached as ANNEX 5.6.
28
5.7. Disposition of real property and certain assets.
(a) As soon as reasonably practical hereafter, the Seller shall, and the
Purchaser shall cause the Company to, negotiate in good faith and
execute an agreement or agreements pursuant to which all real estate
properties located on the industrial site of Leerdam, currently
occupied exclusively or otherwise exclusively used by either of them
(an "EXCLUSIVE OCCUPANT"), that are necessary for the conduct of its
business as currently conducted, to which the Exclusive Occupant
does not have full title and the partial or full title of which is
held by the other (the "EXCLUSIVE USE PROPERTIES"), be leased and
thereafter transferred to the Exclusive Occupant. A map outlining
the Exclusive Use Properties is attached as ANNEX 5.7(a). Such
agreement or agreements (and the Parties' conduct in the interim)
shall be negotiated according to the following principles:
(i) each Exclusive Occupant shall have the exclusive right to
occupy and use the Exclusive Use Properties that it currently
occupies and uses;
(ii) the Parties shall make their best efforts to transfer the title
to any Exclusive Use Properties to the relevant Exclusive
Occupant, provided, however, that any such transfer of title
shall be completed under arm's length conditions and after the
lapse of any time period necessary to implement such a transfer
and to mitigate in the most efficient manner any damages,
whether financial or otherwise, incurred to the transferor and
the transferee as a result of such transfer;
(iii) any lease granted to an Exclusive Occupant in connection with
any of its Exclusive Use Properties shall be agreed under arm's
length conditions;
(iv) each Exclusive Occupant shall bear all Taxes, costs and
expenses (including, without limitation, those related to
insurance, maintenance and repairs) incurred in connection with
and, more generally, shall comply with all obligations relating
to, its Exclusive Use Properties, as if such Exclusive Occupant
were the holder of the full title thereto.
(b) In the event of any dispute arising in connection with the
implementation of Section 5.7(a), the Parties shall appoint an
independent expert with appropriate expertise relating to the
subject matter of such dispute to facilitate the resolution of such
dispute. Such expert shall be selected by the Parties or, if the
Parties fail to agree on such expert within 30 days of receipt of
written notice of such dispute by either Party, appointed by the
President of the International Chamber of Com-
29
merce at the request of either Party. The Parties shall share
equally the costs of such expert.
(c) The Company, Crystal and the Seller shall be entitled to continue
the use of the properties, facilities and assets of the Company,
Crystal and the Seller that have consistently been used jointly by
them (as described and indicated in ANNEX 5.7(a)) (the "SHARED
PROPERTIES"), according to the following principles:
(i) The owner of a Shared Property shall grant the other user(s)
access to and use of such Shared Property consistent with past
practice, subject to such reasonable changes as the users may
negotiate in good faith.
(ii) Any user of a Shared Property that it does not own may give
notice to the owner thereof of its intention to cease
permanently use of such Shared Property. After the later of
the expiration of 30 days from the receipt of such notice and
the actual cessation of use of such Shared Property, the user
giving notice shall have no further entitlement to use, and no
further obligations with respect to, such Shared Property. If
any user of a Shared Property that it does not own ceases to
use such Shared Property for a period of 6 months, the owner
of such Shared Property may terminate such user's entitlement
to access and use such Shared Property upon 3 months' written
notice, if such user does not object reasonably to such
termination and resume consistent use within such 3 months'
period.
(iii) The owners and users of Shared Properties shall take such
reasonable further steps as may be legally required to make
effective their and the other users' respective rights with
respect to the Shared Properties.
(iv) No later than 30 days before the end of each year, the users
of each Shared Property shall negotiate in good faith their
anticipated use (expressed as a percentage) of such Shared
Property in the subsequent year, based on past practice and
any reasonable anticipated changes. Unless otherwise provided
in the Service Agreement to be entered into pursuant to
Section 5.6, such users shall share all Taxes, costs and
expenses (including, without limitation, those related to
insurance, maintenance and repairs) incurred in connection
with such Shared Property according to their respective
percentage of use. If, at the end of any year, the owner of
such Shared Property estimates that actual use by any user
deviated by more than 15% from the agreed percentage, it shall
notify such estimate to the other user(s) in writing, setting
out the particular details of such estimate, and the users
shall endeavor to agree
30
in good faith on any appropriate reallocation of such Taxes,
costs and expenses according to the actual percentages of use.
If no such agreement is reached within 30 days of such written
notice, the owner or the user may commence proceedings under
Article 9.
(v) Any Taxes, costs and expenses incurred solely by reason of one
user's activities or use of a Shared Property shall be borne
exclusively by such user.
(vi) Unless otherwise provided in the Service Agreement to be
entered into pursuant to Section 5.6, and subject to the
allocation of costs and expenses pursuant to paragraphs (iv)
and (v), the owner of each Shared Property shall be
responsible for maintenance, insurance, payment of Taxes and
other actions necessary to maintain the utility of the Shared
Property for the other users.
(d) The assets set out in ANNEX 5.7(d) shall be transferred to the
Company according to the same principles set out in Section 5.7(a),
except that the Company shall have the continued exclusive use of
such assets without charge during the interim between the date
hereof and transfer, and such transfer shall be for a consideration
of Euro 1.
(e) The Seller shall assign to the Company, and shall cause the Company
to accept, an assignment, pursuant to which the Seller assigns all
of its rights and obligations under two lease agreements between the
Seller and Buijs v.o.f. Zand- en Grindhandel, in the form attached
as ANNEX 5.7(e).
(f) The map attached as ANNEX 5.7(a) is to be interpreted assuming the
accuracy of the information as to ownership of the relevant parcels
attached to such map and without prejudice to the representations
and warranties set out in Section 3.9. The exclusive or shared use
of the facilities and land of the Seller, the Company and Crystal as
of the date hereof, as shaded on the map in light of such ownership
assumptions, shall determine whether such facilities and land
constitute properties fully-owned and exclusively used by the owner,
Exclusive Use Properties or Shared Properties. Notwithstanding any
other provision of this Section 5.7, and without prejudice to the
representations and warranties set out in Section 3.9, the map,
which reflects the Parties' current best understanding, after
careful consideration, of the use of the properties identified
therein, may be revised in good faith based on the actual use and
ownership of such properties as of the date hereof, consistent with
the principles set out in Sections 5.7(a) and (c), to the extent
that such actual use or ownership as of the date hereof is not
correctly reflected by
31
such map. The Party proposing any such revision shall present
substantial evidence in support of any such revision within 60 days
after the date hereof.
5.8. Purchase of Crystal products. For each of the calendar years 2003 to
2005, the Seller shall purchase from Crystal at leastEuro 150,000 of
products manufactured by Crystal.
5.9. Insurance. From the date hereof until the Company and Crystal obtain
replacement coverage:
(a) The Seller shall ensure the continued coverage of the Company and
Crystal for the insurance policies set out in ANNEX 5.9. The
Purchaser shall make or cause the Company and/or Crystal to make all
corresponding premium payments with respect to such insurance
policies.
(b) The Purchaser shall cause the Company and Crystal to take all
reasonable steps promptly to obtain replacement coverage for such
insurance policies.
(c) The Purchaser, the Company and Crystal shall be responsible for any
costs and expenses incurred in connection with any claim made under
such insurance policies, including without limitation any
out-of-pocket expenses, deductibles and amounts in excess of any
coverage limits.
ARTICLE 6
OPTION TO TRANSFER CRYSTAL
6.1. Put; term. The Seller hereby grants to the Purchaser an option to
transfer Crystal to the Seller (the "PUT") for a price of Euro 1. The Put
shall automatically expire and no longer be exercisable on April 1, 2003,
unless the Purchaser notifies the Seller in writing before such date that
it wishes to extend the exercise period, in which case the Put shall
automatically expire and no longer be exercisable on or after July 1,
2003.
6.2. Exercise. The Purchaser may give written notice to the Seller of its
intent to exercise the Put at any time before the expiration of the Put.
Upon the Seller's receipt of such notice, the Parties shall promptly take
such actions as are necessary to complete the transfer of all of the
shares of Crystal from the Company to the Seller for the agreed price
ofEuro 1. Without prejudice to any rights the Seller may have arising out
of Section 6.5, neither the Company nor the Purchaser shall be required
to make any representation, warranty or covenant with respect to such
transfer, except as specifically envisioned in this Agreement and apart
from the obligation to deliver all of the shares of Crystal free and
clear of all Encumbrances.
32
6.3. Purchase of Additional Crystal Shares and rescheduling of Crystal Debt.
Upon expiration of the Put (without it having been exercised):
(a) The Seller shall cause the holder of the Crystal Debt, and the
Purchaser shall cause Crystal, to agree to reschedule an amount (the
"RESCHEDULED CRYSTAL DEBT") of the Crystal Debt equal to the lesser
of (i) the Crystal Debt as at December 31, 2002, less any amount
repaid pursuant to Section 4.4(b); and (ii) Euro 1.6 million. Such
Rescheduled Crystal Debt shall be repayable to the holder thereof in
three equal annual installments due on December 31 of each year
beginning with 2003, and shall not bear interest during such payment
period.
(b) The Purchaser shall cause Crystal to issue additional capital stock
for the amount of the Crystal Debt in excess of the Rescheduled
Crystal Debt (the "ADDITIONAL CRYSTAL SHARES"), and the Seller shall
cause the holder of the Crystal Debt at the time of such expiration
to contribute such excess amount in kind to the capital of Crystal,
resulting in a corresponding set-off for the amount of the Crystal
Debt in excess of the Rescheduled Crystal Debt.
(c) Within one Business Day following the issuance of the Additional
Crystal Shares, the Seller shall cause the holder of the Additional
Crystal Shares to sell the Additional Crystal Shares to the
Purchaser or the Company, at the Purchaser's direction, and the
Purchaser shall purchase or cause the Company to purchase the
Additional Crystal Shares for a price of Euro 1.
(d) The Purchaser shall cause the Company to assume or guarantee
Crystal's obligations under this Section 6.3 within 15 days after
the date hereof. Following the expiration of the Put, the Parties
shall promptly take such actions as are necessary to complete the
transfer of the Additional Crystal Shares to the Purchaser or the
Company, at the Purchaser's direction, and the rescheduling of the
Rescheduled Crystal Debt.
6.4. Extension of Put. If the Purchaser elects to extend the Put pursuant to
Section 6.1 beyond March 31, 2003, the Purchaser shall pay to the Seller
an amount in consideration for the extension of the Put corresponding to
the interest that would be payable on the Rescheduled Crystal Debt from
and including April 1, 2003 through (a) if the Put is subsequently
exercised, the date on which the Put is exercised; or (b) if the Put is
not subsequently exercised, June 30, 2002, in either case calculated at a
rate based on the actual average weighted cost incurred by BSN Glasspack
Finance in obtaining external financing, plus a margin equal to that
invoiced by BSN Glasspack Finance to its Affili-
33
ates, consistent with past practice. Such amount shall be payable on
the date of exercise or expiration of the Put, as applicable.
6.5. Management of Crystal. From the date hereof until the earlier of the date
on which the Put is exercised and the date on which the Put expires:
(a) The Purchaser shall manage or shall cause the Company to manage the
business of Crystal, and shall cause Crystal to conduct its affairs
in the Ordinary Course of Business, using all reasonable efforts in
accordance with past practice to (i) preserve the organization and
value of its business, its goodwill and reputation, its
relationships with clients, suppliers, customers, agents, public
authorities and any other parties having business dealings with it,
(ii) keep available the services of its employees, (iii) maintain
all assets and properties in working condition, and (iv) comply in
all material respects with all contractual and other obligations
applicable to its business.
(b) The Purchaser shall not and shall cause the Company not to take any
action with respect to Crystal, and shall cause Crystal not to take
any action, outside the Ordinary Course of Business without the
Seller's written consent.
(c) The Purchaser shall provide or shall cause the Company to provide to
the Seller the monthly financial statements of Crystal in a timely
fashion. The Seller shall submit any inquiries with respect to such
financial statements within 10 Business Days of the Seller's receipt
thereof.
6.6. Lead Crystal Product operations. From the date hereof until the earlier
of the date on which the Put is exercised and the date on which the Put
expires, the Purchaser shall not, and shall cause the Company not to,
undertake the manufacture of Lead Crystal Products other than through the
business of Crystal.
6.7. Trademark and trade name matters. The Seller shall use its utmost best
efforts to cooperate with the Purchaser in taking all reasonable measures
to obtain assurances (including, as necessary, from the Royal Court of
the Netherlands) regarding the continued ability of the Company to use
its trade name and trademarks containing the words "Koninklijke" and/or
"Royal", whether the Company remains affiliated with Crystal or not.
6.8. Consequences of exercise. Subject to the condition precedent of the
Purchaser exercising the Put, the Parties agree as follows, with respect
to the period following such exercise:
34
(a) Confidentiality. Until December 31, 2005, the Purchaser shall
refrain, and shall cause its Affiliates to refrain, from providing
any third party (except for its advisors and bankers) any
Confidential Information about Crystal obtained in the course of
negotiating the Transaction, other than as required by applicable
Law or to enforce its rights under this Agreement.
(b) Restriction of activities. The Purchaser shall cause the Company not
to manufacture Lead Crystal Products at the Leerdam site until
December 31, 2004, and not to use the trade name "Royal Leerdam" in
connection with Lead Crystal Products thereafter, for so long as
Crystal continues to use the trade name "Royal Leerdam Crystal". (c)
Non-solicitation. Until December 31, 2004, the Purchaser shall not
employ or solicit for employment, either directly or indirectly,
management employees of Crystal (except for such employees whose
employment has been terminated by Crystal and for a cause not
pertaining to the employees concerned), or incite any of those
employees to leave any position they occupy now or in the future
with Crystal. This prohibition shall not apply to advertisements
placed in publications in general circulation.
(d) Seller's non-competition covenant. For the purposes of Section 5.3,
the manufacture and distribution of Lead Crystal Products shall not
constitute an activity that competes with the Company.
(e) Sale of Crystal. Before agreeing to any sale to any third party of
Crystal, or any substantial portion thereof, the Seller shall offer
such business to the Purchaser for the price offered by such third
party. If the Purchaser does not accept such offer within 25
Business Days of the Purchaser's receipt of such offer, the Seller
may proceed with the sale to a third party; provided, however, that
if the sale to the third party is not consummated within six months
after the Purchaser's rejection of such offer, the procedure
contemplated in the preceding sentence shall be applicable before
any sale can be made.
(f) Intellectual Property.
(i) The Purchaser shall not, and shall cause the Company not to,
object to the use by Crystal of the name "Royal Leerdam
Crystal" in connection with the production and distribution
by Crystal of Lead Crystal Products. The Purchaser shall, and
shall cause the Company to, take such further steps as are
35
reasonably requested by the Seller or Crystal that are
necessary to permit Crystal to continue such use.
(ii) For so long as the Company uses the trademark or trade name
"Royal Leerdam", the Seller shall cause Crystal not to object
to the use by the Company of the name "Royal Leerdam" in
connection with the production and distribution of the
Company's products, except as provided in Section 6.8(b).
(iii) For so long as the Company uses the trademark or trade name
"Royal Leerdam", the Seller shall, or shall cause Crystal to,
notify the Purchaser and the Company in writing of any
proposed use of the name "Royal Leerdam Crystal" in
connection with any products other than Lead Crystal
Products, or any registration of the name "Royal Leerdam
Crystal" as a trademark in any jurisdiction, at least 60 days
before such use commences or such registration application is
filed. The Purchaser may, within such 60-day period, notify
its objection to any such proposed use or registration on the
grounds that it would have an adverse effect on the goodwill
of the Company, its Intellectual Property Rights and/or its
products or the continued enjoyment by the Company of its
rights attached to the trademark "Royal Leerdam", which shall
be reasonably justified. Upon its receipt of such a notice,
the Seller shall not, and shall cause Crystal not to,
commence such use or file such registration application,
without prejudice to its right to challenge the grounds for
the Purchaser's objection.
(iv) Nothing in this Agreement shall be construed to limit the
Company's right to use the name "Royal Leerdam", or to
require the Purchaser or the Company to take any steps to
limit such use, except for Section 6.8(b).
(v) The Purchaser shall cause the Company to transfer to Crystal
the registered trademarks "Leerdam Unica" and "Leerdam
Serica" for Euro 1 each.
(g) Service Agreement. The Purchaser shall cause the Company to provide
the services to Crystal that are indicated in the Service Agreement
referred to in Section 5.6 as conditional upon the exercise of the
Put.
(h) Real Property. The premises currently occupied and used by Crystal
in the Royal Leerdam manufacturing building and the sales store
adjacent to the parking lot near the main entrance to the Leerdam
site shall not be considered either an Exclusive Use Property or a
Shared Property. The Company shall grant Crystal a
36
lease (expiring on the tenth anniversary of the date hereof) for
such property on market terms and conditions, to include the
following specific provisions:
(i) The Company shall be responsible for structural maintenance
(including walls, floor, carpeting, ceiling, roof, and
electrical, natural gas and water infrastructure) and for its
share of the showroom, entrance hall, toilets and conference
rooms.
(ii) Crystal shall be responsible for structural maintenance for
the sales store.
(iii) Crystal shall be responsible for maintenance relating to the
manufacturing operation, ventilation of furnaces, lehrs and
any batch delivery systems.
(iv) Crystal shall have the financial responsibility for any
environmental remediation directly related to its activities
in the leased space.
(v) Rent shall be stated at an annual cost per square meter with
an automatic escalation clause at the Dutch CPI.
(vi) Real property tax allocation shall be consistent with the
methodology used between the Company and the Seller.
(vii) Crystal shall bear a portion of the insurance costs for the
relevant buildings proportionate to its share of the total
square meters of space in such buildings, as reasonably
determined by the Company.
(viii) Crystal shall bear a portion of the costs on other shared
spaces, including the parking lots and roadways,
proportionate to its usage of such spaces.
(ix) Crystal may terminate the lease on six months' prior written
notice.
The other premises occupied or used by Crystal shall be subject to
the provisions of Section 5.7(a) - (c) and (f).
(i) Further obligations. The Seller's obligations under Sections 5.2,
5.3, 5.5 and 5.8, to the extent they apply to Crystal, shall no
longer be binding on the Seller.
(j) Pension matters.
(i) If the Account referred to in Section 5.4 has not yet been
paid to the RL Pension Foundation on the date of exercise of
the Put, the amount credited to such Account shall be reduced
as of such date to the amount that would have
37
been credited to the Account as of such date had the
employees of Crystal never been considered to be Eligible
Employees.
(ii) If the Account referred to in Section 5.4 was paid to the RL
Pension Foundation before the date of exercise of the Put,
the Purchaser shall seek to cause the transfer, as soon as
reasonably practicable following such date, from the
Purchaser's Plan to the BSN Plan of such assets and
liabilities as would place the RL Pension Foundation and the
BSN Fund Foundation in the position they would have been in
had the employees of Crystal never been considered to be
Eligible Employees; provided, however, that the provisions of
Section 5.4(i) shall apply mutatis mutandi to such transfer.
ARTICLE 7
INDEMNIFICATION OF PURCHASER
7.1. Indemnification. The Seller shall indemnify, defend and hold harmless the
Purchaser (by way of a payment to be made to the Purchaser or the
Company, at the Purchaser's direction) from and against any and all
Damages that may be imposed on, incurred by or asserted against the
Purchaser, the Company or any Affiliate thereof as a result of:
(a) any breach or inaccuracy of any representation or warranty of the
Seller hereunder;
(b) any breach of any covenant or agreement of the Seller contained in
this Agreement;
(c) any Liability for Taxes of the Seller or its Affiliates, including
any Liability arising out of any Tax assessed at the level of the
Fiscal Unity not allocable to the Company;
(d) any (past, present or future) Liability of the Company on account of
Social Charges, pensions or other employee benefits, to any Person
who was employed by the Company before the date hereof but who is
permanently disabled and was transferred to the payroll of the
Seller or any of its Affiliates.
The Seller shall not be liable for any such Damages arising as a result
of: (i) the passing of, or any change in, after the date hereof, any Law
or administrative practice of any Governmental Authority not actually in
force as of the date hereof (even if retroactive in effect), including,
without limitation, any increase in the Tax rates in effect on the date
hereof or the imposition of any Tax not in effect on the date hereof; or
(ii)
38
any matter, event, circumstances or qualifications disclosed or reflected
in the annexes to this Agreement.
7.2. Environmental Matters.
(a) The Seller shall indemnify, defend and hold harmless the Purchaser
(by way of a payment to be made to the Purchaser or the Company, at
the Purchaser's direction) from and against any and all Damages that
may be imposed on, incurred by or asserted against the Purchaser,
the Company or any Affiliate thereof as a result of any of the
following events and circumstances, to the extent that they occurred
or existed at any time on or before the date hereof:
(i) any pollution, contamination or Release that would violate or
require remediation under any applicable Law on the date
hereof, the source of which is or was any activity of the
Company or any property owned, leased, used or operated by
it;
(ii) any pollution or contamination of any land, premises or
facilities owned, leased, used or operated by the Company
that would violate or require remediation under any
applicable Law on the date hereof;
(iii) any storage or treatment of dangerous or toxic wastes or
substances on land owned, leased, used or operated by the
Company in a manner that would violate any applicable Law on
the date hereof;
(iv) any shipment or transportation of any dangerous or toxic
wastes or substances by the Company or at its direction at
any time before the date hereof in a manner that would
violate any applicable Law on the date hereof;
(v) any disposal of wastes by the Company or at its direction in
a manner that would violate any applicable Law on the date
hereof; and
(vi) any failure of the Company to obtain, maintain in full force
for the operation of the Company's business, submit timely
renewal applications for and comply with all Permits required
under applicable Environmental Laws.
(b) The Seller shall be obligated to make indemnification payments for
claims arising out of the matters set out in this Section 7.2 only
if the aggregate amount of such claims exceeds Euro 1 million.
39
(c) No disclosure by the Seller or any other Person, whether in this
Agreement or otherwise, pertaining to the matters set out in Section
7.2(a), shall qualify or limit the Seller's obligations under this
Section 7.2.
(d) The Seller shall not be liable for any Damages under this Section
7.2 arising as a result of the passing of, or any change in, after
the date hereof, any Law or administrative practice of any
Governmental Authority not actually in force as of the date hereof
(even if retroactive in effect), except for orders, Judgments and
decisions based on any Law actually in force as of the date hereof,
but including, without limitation, any increase in the Tax rates in
effect on the date hereof or the imposition of any Tax not in effect
on the date hereof.
7.3. Calculation of Damages. In calculating the amount of any Damages claimed
by the Purchaser pursuant to this Article 7:
(a) the amount of any indemnification or other recoveries (including
insurance proceeds) paid to the Purchaser or the Company by any
third party with respect to such Damages shall be deducted;
(b) the amount of any reserve or provision included in the Financial
Statements for Damages to which such claim relates shall be
deducted; and
(c) the amount of the Damages shall be increased or reduced by an amount
such that the Purchaser or the Company shall be, after having been
indemnified and taking into account the Tax consequences of such
payment (including Tax savings or Tax benefits, including without
limitation any Tax reduction, credit, redemption or loss carry back
or carry forward), in the same position as it would have been, had
the Damages not occurred.
In the event that the amount of any reduction in the amount of Damages
calculated under this Section 7.3(a) is determined only after payment by
the Seller of the amount otherwise required pursuant to this Article 6,
the Purchaser or the Company shall repay to the Seller promptly after
such determination any such payments that the Seller would not have had
to make pursuant to this Article 6, had such determination been made at
or prior to the time of such payment.
7.4. Method of Asserting Claims, etc. All claims by the Purchaser shall be
asserted and resolved as follows:
(a) Claim Notices. In the event that (i) any claim, demand or Proceeding
is asserted or instituted by any Person other than the Purchaser
and/or its Affiliates (including
40
by any Governmental Authority) (a "THIRD PARTY") which could give
rise to Damages for which the Seller would be liable to the
Purchaser or the Company hereunder (any such claim, demand or
Proceeding, a "THIRD PARTY CLAIM"), or (y) the Purchaser or the
Company shall have a claim to be indemnified by the Seller which
does not involve a Third Party Claim (any such claim, a "DIRECT
CLAIM"), the Purchaser shall send to the Seller a written notice (a
"CLAIM NOTICE") specifying the factual basis of such claim and the
amount or a good faith estimated amount of related Damages (which
estimate shall not be conclusive of the final amount of such claim),
all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which a right to be
indemnified is claimed, all supporting evidence in order for the
Seller to assess the merits of the claim and the computation or
estimate of Damages, as well as the mention of the beneficiary of
the indemnification, if any.
(b) Time for Claim Notice. The Purchaser shall send a Claim Notice: (i)
in the case of a Third Party Claim, within 30 days of receipt of
actual notice by the Company of such Third Party Claim (or such
shorter period as may be warranted under the circumstances), and
(ii) in the case of a Direct Claim, with reasonable promptness in
view of the circumstances (but in no event later than 30 days after
or the Company first becomes aware of the facts upon which the
Direct Claim is based); provided, however, that in either case any
delay in sending a Claim Notice shall not result in the Purchaser or
the Company forfeiting any right hereunder, but may result only in
the deduction of an amount from any indemnity payable with respect
to such Third Party Claim or Direct Claim, to the extent that the
Seller establishes that such delay has actually prejudiced its
defense against such Third Party Claim or Direct Claim. For purposes
of this Section 7.4(b), the knowledge of the Company shall mean the
knowledge of the general manager of the Company.
(c) Direct Claims. In the event of a Direct Claim, the Seller shall have
30 days following its receipt of the relevant Claim Notice (the
"DIRECT CLAIM REVIEW PERIOD") to make such investigation of the
underlying claim as it considers necessary or desirable. If the
relevant parties agree, on or prior to the expiration of the Direct
Claim Review Period, upon the validity and amount of such claim, the
Seller shall pay to the Purchaser, within 10 days following the date
of such agreement, the agreed amount of such claim or Damage. If the
Parties are unable to reach an agreement on or prior to the date of
the expiration of the Direct Claim Review Period or if the Seller
notifies the Purchaser during the Direct Claim Review Period that it
disputes its liability to the Purchaser in respect of the under-
41
lying claim, setting forth the reasons for such objection, the
Seller or the Purchaser may commence proceedings pursuant to Article
9.
(d) Third Party Claims.
(i) Third Party Claim Review Period. In the event of a Third
Party Claim, the Seller shall have 30 days following its
receipt of the relevant Claim Notice (the "THIRD PARTY CLAIM
REVIEW PERIOD") to make such investigation of the underlying
claim as it considers necessary or desirable and to notify
the Purchaser whether or not it: (x) disputes its liability
to the Purchaser in respect of such Third Party Claim (and if
so, the Seller shall set out the reasons for such
disagreement), and (y) elects to control the defense of such
Third Party Claim. If the Seller notifies the Purchaser
within the Third Party Claim Review Period that it disputes
its liability to the Purchaser in respect of the Third Party
Claim, and the Parties do not resolve such dispute by the end
of the Third Party Claim Period, either Party may commence
proceedings under Article 9.
(ii) Defense of Third Party Claims.
(A) In the event that the Seller notifies the Purchaser
during the Third Party Claim Review Period that it
elects to control the defense of the Third Party Claim,
then until such time, if any, as it is determined or
agreed that the Seller has no liability to the Purchaser
in respect of such Third Party Claim, the Seller shall
have the right (but not the obligation) to control the
defense of such Third Party Claim and may retain counsel
of its choice to represent the Purchaser or the Company
and shall pay the fees and disbursements of such
counsel. To the extent requested by the Seller, the
Purchaser shall and shall cause the Company to take such
actions, provide such information, document, data as the
Seller shall consider reasonably necessary or
appropriate under the circumstances and to cooperate
with the Seller and its counsel in contesting any such
Third Party Claim, and shall refrain from taking any
action likely to jeopardize or interfere with the
defense of such claim. The Purchaser or the Company may
assist, at its expense, in the defense against any Third
Party Claim with counsel of its choice.
(B) In the event that the Seller (x) does not elect to
control the defense of a Third Party Claim, (y) fails to
elect to control the defense of a Third
42
Party Claim on a timely basis, or (z) having elected to
control the defense of a Third Party Claim on a timely
basis, fails to assume control of any such defense with
reasonable promptness after written demand to such
effect by the Purchaser, the Purchaser shall conduct or
shall procure that the Company conducts the defense of
such Third Party Claim (subject to subsection (iv)
below) in good faith and using all reasonable means and
defenses available to it or to the Company and shall
have the right to retain counsel of its choice. The
Purchaser or the Company shall keep the Seller timely
informed of the development of the underlying claim. At
any time during the defense of such Third Party Claim,
the Seller shall have the right (x) to retain counsel of
its choice, at its expense, and (y) to make such
recommendation as it deems appropriate for the defense
of said Third Party Claim.
(iii) Counterclaim and Cross-Claim. To the extent reasonably
requested by the Seller and related to the claim in question,
the Purchaser shall make or shall procure that the Company
makes any counterclaim against any Person asserting such
Third Party Claim or any cross-claim against any other Person
that may be liable; provided, however, that the Purchaser or
the Company shall not be required to make any counterclaim or
cross-claim that could prejudice its commercial interests.
The Seller shall be responsible for all legal fees and costs
in relation with such counterclaim.
(iv) Settlement of Third Party Claims.
(A) If the Seller elects to control of the defense of a
Third Party Claim as provided in Section 7.4(d)(ii), the
Seller shall not be liable for any Third Party Claim
which is settled or otherwise compromised or in respect
of which any admission of liability is made by the
Purchaser or the Company without its prior written
consent. In such connection, if the Purchaser or the
Company receives from a Third Party or if the Purchaser
or the Company proposes to make to a Third Party an
offer of settlement of such Third Party Claim (a
"SETTLEMENT OFFER"), the Purchaser or the Company shall
notify the Seller of such Settlement Offer promptly upon
receipt thereof from the Third Party and reasonably in
advance of responding thereto, or reasonably in advance
of making such Settlement Offer, and shall provide with
such notice all related supporting documentation
required to enable the Seller to assess the relative
merits of the Settlement Offer. At the reasonable
re-
43
quest of either of the Parties, the Parties will consult
in good faith with respect to any such Settlement Offer.
Within 20 Business Days from the receipt of the
Settlement Offer notification, the Seller shall
determine whether to consent to the Settlement Offer,
which consent shall not be unreasonably withheld. If a
Settlement Offer involving only the payment of monetary
damages is received, which the Seller, but not the
Purchaser, is willing to accept, the Purchaser may elect
to continue the defense of such Third Party Claim at its
own expense; provided that, in that case, the liability
of the Seller shall be limited to the lesser of: (i)
Damages calculated as if the Third Party Claim were
settled in accordance with the proposed Settlement
Offer, and (ii) the Damages actually suffered by the
Purchaser or the Company taking into account the final
determination of the Third Party Claim. The Seller shall
not consent to any Settlement Offer involving relief
other than or in addition to the payment of monetary
damages without the Purchaser's written consent.
(B) If the Seller does not elect to control the defense of
the Third Party Claim, the Purchaser or the Company
shall keep the Seller timely informed of any Settlement
Offers it receives and any related negotiations, and
shall notify the Seller of its intention to accept or to
make any Settlement Offer it deems fair and reasonable,
without prejudice to any right of indemnification the
Purchaser may have against the Seller under this
Agreement, such notification providing the terms and
conditions of the Settlement Offer. Within 15 Business
Days of receipt of such notice, the Seller may deliver
to the Purchaser a notice either approving or disputing
the Settlement Offer. If the Seller disputes the
Settlement Offer and admits in writing its liability to
the Purchaser for all Damages arising out of such Third
Party Claim, the Seller may immediately assume the
control of the defense of such Third Party Claim
pursuant to Section 7.4(d)(ii)(A). If a notice disputing
a Settlement Offer contains no such admission, or if the
Seller does not deliver a notice within the 15-Business
Day period, the Purchaser or the Company shall be free
to enter into any settlement of such Third Party Claim,
without prejudice to their indemnification rights under
this Agreement.
(e) Cooperation. From and after the delivery of a Claim Notice
hereunder, at the reasonable request of the Seller, the Purchaser
shall and shall cause the Company
44
to grant the Seller and its representatives (including professional
advisors) reasonable access to the books, records, computerized
systems, senior management, employees and properties of the
Purchaser or of the Company to the extent reasonably related to the
matters to which the Claim Notice relates. The Seller will not, and
shall require that its representatives do not, use (except in
connection with such Claim Notice, the defense of any related Third
Party Claim and any counterclaims or cross-claims made pursuant to
subsection (d)(iii) above) or disclose to any third party other than
the Seller's representatives (except as may be required by
applicable Laws) any information obtained pursuant to this Article
6. All such access shall be granted during normal business hours,
and shall be granted under conditions which will not unduly
interfere with the business and operations of the Purchaser or of
the Company.
(f) Mitigation. The Purchaser shall use its reasonable efforts and shall
cause the Company to use its reasonable efforts to mitigate any
Damages resulting from any matters giving rise to a claim for
indemnification under this Article 7, including without limitation
(i) pursuing in good faith any claim that it or the Company may have
under any applicable insurance policy or similar arrangement; and
(ii) not taking any action vis-a-vis any Governmental Authority or
other third party aimed at causing a breach of any representations
and warranties with the view to collect Damages that would not
otherwise have been incurred and that would give rise to a claim for
indemnification under this Article 7, other than as required by
applicable Law or in the pursuit of other legitimate business
purposes.
(g) Payment. Amounts payable by the Seller under this Article 7 with
respect to Third Party Claims shall become due and payable
immediately upon the Purchaser's or the Company's legal or
contractual obligation to pay such amount to the relevant Third
Party.
(h) Subrogation. Upon the receipt of payment from the Seller with
respect to any claim, the Purchaser shall subrogate the Seller in
all of the Purchaser's and the Company's rights against Third
Parties with respect to such claim.
7.5. De minimis. Subject to Section 7.8, no indemnification shall be paid in
connection with any claim under Section 7.1 for an amount less than Euro
10,000 (it being understood that claims for amounts exceeding Euro
10,000, are to be fully indemnified, subject to the terms of this
Agreement, including the amount up to Euro 10,000), unless such claim
involves a breach of a representation or warranty under Article 3 that is
qualified by reference to the materiality of the breach. A series of
claims having the same cause shall be considered together as one claim
for the purposes of this Section 7.5.
45
7.6. Deductible. Subject to Section 7.8, the Seller shall be obligated to make
any indemnification payment only if the aggregate amount of the claims
made by the Purchaser under Section 7.1 exceeds Euro 250,000, and in such
case only for the excess of such claims over that amount.
7.7. Maximum Amount. Subject to Section 7.8, the Seller's liability for claims
under Sections 7.1 and 7.2 shall not exceedEuro12 million in the
aggregate.
7.8. Exceptions to limitations on indemnification.
(a) Sections 7.5, 7.6 and 7.7 shall not apply to claims arising out of:
(i) the Seller's obligation to deliver the Shares and the
Adjusted Debt free and clear of all Encumbrances pursuant to
Section 1.1;
(ii) the Company's ownership of all of the shares in the capital
of Crystal free and clear of all Encumbrances;
(iii) the validity of the Company's existence and Crystal's
existence under the Laws of the Netherlands;
(iv) breaches of the Seller's representations under Section 3.12;
and
(v) the matters set out in Section 7.1(b), (c) and (d).
(b) Sections 7.5 and 7.6 shall not apply to claims arising out of
Section 7.2.
7.9. Interest. Any amounts due to the Company or the Purchaser, or to be
repaid to the Seller, under this Article 6 shall automatically bear
interest at a rate per annum equal to EURIBOR for three-month deposits
plus 1.25% calculated on the basis of a 365-day year and the actual
number of days elapsed, from the thirtieth day after the date of the
corresponding initial payment giving rise to the right to indemnification
or repayment.
7.10. Deadlines for Claims. Any claim for breach of a representation or
warranty under Section 7.1(a), except for claims for breach of the
representations and warranties set out in Sections 7.8(a)(i), (ii) and
(iii), shall give rise to indemnification only to the extent that the
Purchaser notifies it to the Seller before the expiration of an 18-month
period from the date hereof; provided, however, that claims related to
Tax and Social matters can be made until the expiration of a three-month
period after the expiration of the relevant statute of limitations, and
claims for breach of the Seller's representations under Section 3.12
related to intra-group Indebtedness can be made until the expiration of a
5-year period from the date hereof. Any claim brought under Section 7.2
shall give
46
rise to indemnification only to the extent that the Purchaser notifies
it to the Seller before the expiration of a 7-year period from the date
hereof.
7.11. Release. The Seller shall not be released from any obligations under this
Article 6 as a result of (a) its lack of awareness of the events, facts
or circumstances resulting in a claim hereunder (except where expressly
specified); or (b) the approval of the yearly accounts of the current
fiscal year by the shareholders' meeting of the Company.
7.12. Seller's activities.
(a) The Seller shall indemnify, defend and hold harmless the Purchaser
(by way of a payment to be made to the Purchaser or the Company, at
the Purchaser's direction) from and against any and all Damages that
may be imposed on, incurred by or asserted against the Purchaser,
the Company or any Affiliate thereof as a result of any Liability
arising out of the Seller's conduct of activities on the property or
premises of the Company (including on Exclusive Use Properties and
Shared Properties), whether before or after the date hereof.
(b) No disclosure by the Seller or any other Person, whether in this
Agreement or otherwise, of any events, facts or circumstances
pertaining to the matters set out in Section 7.12(a), shall qualify
or limit the Seller's obligations under this Section 7.12.
(c) Claims brought under this Section 7.12 shall be subject to Sections
7.3, 7.4, 7.9, and 7.11. Notwithstanding anything in this Agreement
to the contrary, claims brought under this Section 7.12 shall not be
subject to Sections 7.5 through 7.8, or Section 7.10.
7.13. Crystal. For so long as the Put has not been exercised, all references in
this Article 7 to the Company shall be construed as references to Crystal
as well as the Company, and the reference in Section 7.3(b) to the
Financial Statements shall be construed to include the financial
statements of Crystal referred to in Section 3.7(d). Any claim for
Damages pursuant to this Article 7 with respect to Crystal shall be
payable only upon expiration of the Put, assuming the Put has not been
exercised.
ARTICLE 8
INDEMNIFICATION OF SELLER
8.1. Indemnification. Without prejudice to any rights under Article 7, the
Purchaser shall indemnify, defend and hold harmless the Seller (by way of
a payment to be made to the Seller or at the Seller's direction) from and
against any and all Damages that may
47
be imposed on, incurred by or asserted against the Seller or any
Affiliate thereof as a result of:
(a) any breach or inaccuracy of any representation or warranty of the
Purchaser hereunder; and
(b) any breach of any covenant or agreement of the Purchaser contained
in this Agreement.
The Purchaser shall not be liable for any such Damages arising as a
result of: (i) the passing of, or any change in, after the date hereof,
any Law or administrative practice of any Governmental Authority not
actually in force as of the date hereof (even if retroactive in effect),
including, without limitation, any increase in the Tax rates in effect on
the date hereof or the imposition of any Tax not in effect on the date
hereof; or (ii) any matter, event, circumstances or qualifications
disclosed or reflected in the annexes to this Agreement.
8.2. Company's activities.
(a) The Purchaser shall indemnify, defend and hold harmless the Seller
from and against any and all Damages that may be imposed on,
incurred by or asserted against the Seller as a result of any
Liability arising out of the Company's conduct of activities (and,
for so long as the Put has not been exercised, Crystal's conduct of
activities) on the property or premises of the Seller (including on
Exclusive Use Properties and Shared Properties), after the date
hereof.
(b) No disclosure by the Purchaser or any other Person, whether in this
Agreement or otherwise, of any events, facts or circumstances
pertaining to the matters set out in Section 8.2(a), shall qualify
or limit the Purchaser's obligations under this Section 8.2.
8.3. Claims procedure, etc. Sections 7.3, 7.4, 7.9, and 7.11 shall apply
mutatis mutandi to claims brought under this Article 8, so that
references in such provisions to the Seller, on the one hand, and the
Purchaser, the Company and Crystal, on the other, shall be reversed as
appropriate.
ARTICLE 9
DISPUTE RESOLUTION
9.1. Arbitration. Any disputes that may arise out of or in connection with
this Agreement shall be settled finally and exclusively by arbitration by
a single arbitrator appointed
48
and proceeding in accordance with the Rules of Arbitration of the
International Chamber of Commerce. The arbitration tribunal shall be
located in Brussels.
9.2. Language. All submissions and awards in relation to arbitration under
this Agreement shall be made in English and all arbitration proceedings
and all pleadings shall be in English.
9.3. Waiver; enforcement. Any award made pursuant to this Article 9 shall be
final and not subject to appeal. The Parties hereby waive all challenges
to any such award. Any Party may present any such award in any court of
competent jurisdiction for enforcement. In any such enforcement action,
regardless of location, no Party will (and the Parties hereby waive any
right to) seek to invalidate or modify the decision of the arbitrators or
otherwise to invalidate or circumvent the procedures set out in this
Article 9. The Parties understand and agree that this Article 9 may be
specifically enforced by injunction or otherwise in any court of
competent jurisdiction.
ARTICLE 10
INTERPRETATION; DEFINITIONS
10.1. Headings. The Article headings in this Agreement are for convenience of
reference only and shall not be deemed in themselves to have any
contractual value or particular interpretation.
10.2. Sections. Unless otherwise specified, references in this Agreement to
"Article", "Section" or "Annex" are to articles and sections of and
annexes to this Agreement.
10.3. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"2001 FINANCIAL STATEMENTS" has the meaning given to it in Section
3.7(a).
"2002 FINANCIAL STATEMENTS" has the meaning given to it in Section
3.7(b).
"ABTN" means the memorandum on the policy of the board of the BSN Fund
Foundation (Actuariele en Bedrijfstechnische Nota) with attachments.
"ACCOUNT" has the meaning given to it in Section 5.4(c)(i).
"ADDITIONAL CRYSTAL SHARES" has the meaning given to it in Section
6.3(b).
"ADJUSTED DEBT" has the meaning given to it in Section 1.2.
49
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. Before and
through the execution of this Agreement, the Company and Crystal shall
not be considered Affiliates of the Seller or the Purchaser. Following
the execution of this Agreement: (a) the Company shall be considered an
Affiliate of the Purchaser; (b) for so long as the Put is not exercised,
Crystal shall not be considered an Affiliate of the Seller and shall be
considered an Affiliate of the Purchaser and the Company; and (c)
immediately upon exercise of the Put, Crystal shall cease to be
considered an Affiliate of the Purchaser and the Company and shall be
considered an Affiliate of the Seller.
"AGREEMENT" has the meaning given to it in the preamble hereto.
"BSN FUND FOUNDATION" means Stichting Pensioenfonds Vereenigde
Glasfabrieken, a foundation (stichting) incorporated under the laws of
the Netherlands and having its registered seat at Utrecht, the
Netherlands, which has established and currently operates the BSN Plan.
"BSN PLAN" means the defined pension plan established and operated by the
BSN Fund Foundation as at the date hereof to grant or to have granted
pensions and other financial benefits to current and former employees
(and the dependants thereof) of the Company, in accordance with, and
consisting of and reflected in, the Standard Plan, the TOP Plan, the
Funding Agreement and the ABTN.
"BUSINESS DAY" means a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including
dealings in foreign exchange and foreign currency deposits) in New York
and Amsterdam.
"CLAIM NOTICE" has the meaning given to it in Section 7.4(a).
"COMPETING BUSINESS" has the meaning given to it in Section 5.3(b).
"COMPANY" has the meaning given to it in the recitals hereto.
"CONFIDENTIAL INFORMATION" means information concerning a Party or its
Affiliates (regardless of the form of communication and original author
of or person preparing such information), as well as any information or
analyses derived from such information, disclosed to the other Party or
its Affiliates, agents or representatives, other than (i) information
that was already known to the Party at the time of such disclosure to
such Party; (ii) information that is or becomes available to the public
other than as a result of its disclosure by the Party receiving the
information or such Party's Affiliates,
50
agents or representatives; (iii) information that is obtained from
another source, provided that the Party receiving the information did not
know or have reason to believe that the source of such information was
bound by a confidentiality agreement or other contractual, legal or
fiduciary obligation with respect to such information; and (iv)
information independently developed by the Party receiving the
information.
"CONSENT" means any consent, waiver, approval, positive advice,
authorization, exemption, registration, license or declaration of or by,
or filing with, any Person.
"CONTRACT" means any agreement, contract, commitment or undertaking,
whether or not in writing, to which the Company is a party or made by or
given to the Company.
"CRYSTAL" has the meaning given to it in the recitals hereto.
"CRYSTAL DEBT" has the meaning given to it in the recitals hereto.
"DAMAGES" means all Liabilities, damages, penalties, deficiencies,
expenses, fees, losses or Judgments suffered by any party (including
costs of investigation and defense and reasonable attorney's fees), in
each case after the application of any amounts recovered under insurance
contracts or similar arrangements, other than amounts recovered under
such contracts or arrangements the premiums of which are adjusted by an
amount equal to any proceeds paid, and other than amount recovered from
third parties by the damaged party.
"DEBT" has the meaning given to it in the recitals hereto.
"DIRECT CLAIM" has the meaning given to it in Section 7.4(a).
"DIRECT CLAIM REVIEW PERIOD" has the meaning given to it in Section
7.4(c).
"DUTCH CPI" means the Consumer Price Index-All Households
(Consumentenprijsindex-Alle huishoudens), as reported by the Central
Statistical Bureau of the Netherlands.
"DUTCH GAAP" means the generally accepted accounting principles
applicable in the Netherlands, as applied to the Company on a consistent
basis.
"DUTCH PENSIONS ACT" means the Pensioen- en spaarfondsenwet.
"ELIGIBLE EMPLOYEES" means the employees of the Company and Crystal as
set forth in ANNEX 3.18(c) and any individuals commencing employment with
the Company and Crystal between the date hereof and the Pension Transfer
Date, except for such employees who are ineligible for the BSN Plan by
reason of their age or otherwise, for
51
the duration of such ineligibility. If the Put is exercised, the
employees of Crystal shall no longer be considered Eligible Employees.
"ENCUMBRANCE" means any title defect, conflicting claim of ownership,
mortgage, security interest, lien, pledge, claim, right of first refusal,
right to use or occupy, option, charge, covenant, reservation, lease,
order, decree, Judgment, stipulation, settlement, attachment, objection,
limitation or any other similar restriction.
"ENVIRONMENT" means soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds,
drainage basins and wetlands), groundwaters, drinking water supply,
stream sediments, ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural resource.
"ENVIRONMENTAL LAW" means any Law relating to public health and safety,
worker health and safety, noise and pollution or protection of the
Environment (including without limitation Laws relating to Releases of
pollutants, contaminants or chemical, industrial, hazardous or toxic
materials or wastes or otherwise relating to the testing,
characterization, classification, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or chemical, industrial, hazardous or toxic materials or
wastes)
"EXCLUSIVE OCCUPANT" has the meaning given to it in Section 5.7(a).
"EXCLUSIVE USE PROPERTIES" has the meaning given to it in Section 5.7(a).
"FINANCIAL STATEMENTS" means the 2001 Financial Statements and the 2002
Financial Statements.
"FISCAL UNITY" has the meaning given to it in Section 3.20(b).
"FORMER PLAN" has the meaning given to it in Section 3.19(d).
"FUNDING AGREEMENT" means the agreement between the Seller and the BSN
Fund Foundation dated February 26, 1998 regarding the funding of the BSN
Plan.
"GOVERNMENTAL AUTHORITY" means any government or governmental or
regulatory body or political subdivision thereof (or similar body),
whether supranational, federal, state, local or foreign, or any agency or
instrumentality thereof, or any court or arbitrator (public or private).
52
"INDEBTEDNESS" means, in each case as determined under Dutch GAAP, any:
(i) amounts borrowed from any Person, whether or not under normal
commercial lending terms or upon the issue of bills, bonds or notes
(including for the avoidance of doubt, all balances between or among the
Company and Crystal on the one hand and the Seller and/or the Seller's
Affiliates on the other); (ii) obligations in connection with receivables
sold or discounted; (iii) obligations under foreign exchange contracts
and all derivative instruments (including, without limitation, any
interest or currency protection, hedging or financial future
transactions) to the extent that such foreign exchange contracts or
derivative instruments have been executed in connection with any
indebtedness falling within the scope of this definition; (iv)
obligations under any guarantee, counter-indemnity, letter of credit,
indemnity or similar assurance against the financial loss of any Person,
unless such obligations are subscribed to in the course of the Company's
or Crystal's commercial activities to secure obligations other than
indebtedness falling within the scope of this definition; and (v) accrued
interest, prepayment penalties or other costs of discharge relating to
the matters set out in clauses (i) through (iv); but excluding the Debt,
the Crystal Debt and any payable linked to the operations of the Company
and Crystal, including without limitation payables to suppliers and Tax
authorities and Social and employee payables.
"INTELLECTUAL PROPERTY RIGHTS" means any patents, trademarks, trade
names, designs, copyrights and other similar industrial or intellectual
property rights.
"JUDGMENT" means any judgment, order, preliminary or permanent
injunction, temporary restraining order, ruling, award, consent decree or
administrative act of any court, arbitrator, judicial or administrative
authority or other Governmental Authority.
"LAW" means any statute, act, law, EU directive that is directly
enforceable, code, regulation, rule, order, decision or Judgment of any
Governmental Authority.
"LEAD CRYSTAL PRODUCTS" means handmade lead crystal glass products with a
lead content of at least 24%.
"LIABILITY" means any liability or obligations of any nature, whether
known or unknown, accrued, absolute, contingent or otherwise, and whether
due or to become due.
"ORDINARY COURSE OF BUSINESS" means, with respect to any entity, (i) the
usual, regular and ordinary course of the business conducted by such
entity consistent with past practice and custom, and (ii) all
transactions being conducted on an arm's length basis.
53
"PARTY" has the meaning given to it in the preamble hereto.
"PENSION TRANSFER DATE" has the meaning given to it in Section 5.4(d).
"PERMIT" means any permit, license or similar instrument.
"PERMITTED ENCUMBRANCES" means (i) liens for Taxes not yet due, (ii)
warehousemen's, mechanics', carriers', landlords', employees',
repairmen's or similar liens imposed by applicable Law, created in the
Ordinary Course of Business and for amounts not yet due and payable, and
(iii) minor imperfections of title or minor Encumbrances that in the
aggregate do not materially detract from the value of the property
subject thereto or impair in any material respect the use of the property
subject thereto.
"PERSON" means any individual, partnership, corporation, trust,
unincorporated organization, Governmental Authority or other entity.
"PREMIUM DEPOSIT" means the amount of Euro 14,012,863, being the
remainder as of the Reference Date of the advance provided by the Seller
to the BSN Fund Foundation relating to the transitional rules under
Section 15 of the TOP Plan.
"PROCEEDING" means any legal, administrative, arbitration or other
alternative dispute resolution suit, action, investigation, inquiry or
other proceeding initiated by any Person, Governmental Authority or other
party.
"PURCHASE PRICE" has the meaning given to it in Section 1.2.
"PURCHASER" has the meaning given to it in the preamble hereto.
"PURCHASER'S PLAN" has the meaning given to it in Section 5.4(b).
"PUT" has the meaning given to it in Section 6.1.
"PVK" means the Pensioen- en Verzekeringskamer, the Dutch Pensions and
Insurance Supervisory Board.
"REFERENCE DATE" means December 31, 2002.
"RELATED PERSON" means, with respect to any entity, any stockholder,
member of the board of directors, member of the supervisory board, member
of the management board or officer of such entity or any relative of any
such person.
54
"RELEASE" means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment,
whether intentional or unintentional.
"RESCHEDULED CRYSTAL DEBT" has the meaning given to it in Section 6.3(a).
"RL PENSION FOUNDATION" has the meaning given to it in Section 5.4(b).
"SELLER" has the meaning given to it in the preamble hereto.
"SETTLEMENT OFFER" has the meaning given to it in Section 7.4(d)(iv)(A).
"SHARED PROPERTY" has the meaning given to it in Section 5.7(b).
"SHARES" has the meaning given to it in the recitals hereto.
"SOCIAL" means related to Social Charges.
"SOCIAL CHARGE" means any social security contribution and any other
charge or liability relating to employment, including contributions
relating to unemployment, medical costs, disability, death, pensions,
retirement and vacation.
"STANDARD PLAN" means the defined pension plan established and operated
by the BSN Fund Foundation in accordance with, and consisting of and as
reflected in, the Standard Plan Regulations, the Funding Agreement and
the ABTN.
"STANDARD PLAN REGULATIONS" means the Basis-Reglement of the BSN Fund
Foundation.
"SUBSIDY" means any governmental, quasi-governmental or other public and
private grant or subsidy that provides any reimbursement, refund,
abatement, Tax reduction bonus, Tax exemption, Tax discounted loan, Tax
rebate or other Tax advantage or Tax benefit.
"TAX" and "TAXES" mean any taxes and more generally any mandatory levies
(including their principal amount and, as the case may be, penalties,
surcharges and interest thereon) whatever their legal characterization
and beneficiary may be, including, without limitation: (i) corporation
taxes, withholding taxes, Value Added Tax (V.A.T.), excise taxes,
property taxes, business taxes, custom duties, transfer and contribution
taxes, stamp duty, registration taxes and any taxes based on salaries,
(ii) any duty paid in consideration for a service provided to the
Company, (iii) any Liability of the Company determined on the basis of
any tax or by reference to any taxable basis,
55
and (iv) any tax due by a person other than the Company and for which the
Company would be liable, in particular as a result of any joint and
several obligation with such person, any obligation to hold harmless and
indemnify such person, and any obligation to bear the taxes of such
person (in particular as a result of a tax consolidation or any similar
agreement). Where used as an adjective, "TAX" means related to Taxes.
"THIRD PARTY" has the meaning given to it in Section 7.4(a).
"THIRD PARTY CLAIM" has the meaning given to it in Section 7.4(a).
"THIRD PARTY CLAIM REVIEW PERIOD" has the meaning given to it in Section
7.4(d)(i).
"TOP PLAN" means the defined pension plan established and operated by the
BSN Fund Foundation in accordance with, and consisting of and as
reflected in, the TOP Plan Regulations, the Funding Agreement and the
ABTN.
"TOP PLAN REGULATIONS" means the TOP-Reglement of the BSN Fund
Foundation.
"TRANSACTION" means the sale and transfer of the Shares and the Adjusted
Debt and the grant of the Put pursuant to this Agreement and all (i)
actions to be taken and (ii) transactions and agreements to be entered
into and carried out, pursuant to this Agreement.
ARTICLE 11
GENERAL PROVISIONS
11.1. Cooperation. Each of the Parties shall make every effort to ensure that
all measures necessary or useful for the completion of the Transaction
are taken in a timely manner. Each of the Parties shall also take all
necessary steps to permit the other party and its attorneys to ascertain
the satisfactory performance of all of its undertakings made herein.
11.2. Announcements. After the date hereof, each Party shall use its best
efforts to consult in good faith the other Party before the issuance or
publication of any press release or other announcement with respect to
this Agreement or the Transaction. No Party shall issue or publish any
such press release or other announcement before January 6, 2003, without
the written consent of the other Party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, in the event any
such press release or announcement is required by or warranted (in the
opinion of legal counsel) under applicable Law to be made by the Party
proposing to issue the same, such Party may issue
56
such press release or announcement, provided that it uses its best
efforts to consult in good faith the other Party before such issuance.
11.3. Assignment. This Agreement and the rights and obligations arising out of
it shall not be transferable, either in whole or in part, without the
prior written consent of the other Parties.
11.4. Third Party Beneficiaries. Provided that the Company complies with and
agrees to be bound by the terms and conditions of this Agreement in the
same manner as if it had been the Purchaser, the Parties intend the
Company to be a third-party beneficiary of this Agreement and for it to
remain a third-party beneficiary of this Agreement, notwithstanding any
sale of the Shares to any third party. Provided that the Put is not
exercised, and provided that Crystal complies with and agrees to be bound
by the terms and conditions of this Agreement in the same manner as if it
had been the Purchaser, the Parties intend Crystal to be a third-party
beneficiary of this Agreement and for it to remain a third-party
beneficiary of this Agreement, notwithstanding any sale of the shares of
Crystal to any third party. Except for the foregoing, nothing expressed
or implied in this Agreement is intended or shall be construed to confer
upon or give any Person other than the Parties and their successors and
assigns any rights or remedies under or by reason of this Agreement.
11.5. Entire Agreement. This Agreement (including the annexes hereto)
represents the entire agreement existing between the Parties relative to
the subject matter hereof and supersedes all previous negotiations,
discussions, correspondence, communications, understandings and
agreements between the Parties relating to the subject matter of this
Agreement. This Agreement may not be amended except by a written
instrument signed by the Parties.
11.6. Severability. If any provision of this Agreement is held to be invalid in
whole or in part, the validity of the remaining provisions of the
Agreement shall not be affected thereby. In such event, the Parties
shall, to the extent possible, substitute for such invalid provision a
valid provision corresponding to the spirit and purpose thereof.
11.7. Notices and Communications. All notices and other communications required
under or in connection with this Agreement shall be in writing and,
except as otherwise expressly provided herein, shall be deemed to have
been given when delivered in person, on the date of confirmed delivery by
a nationally recognized overnight courier service, or in any other case
upon actual receipt by the intended recipient. All such notices and other
communications shall be dispatched to the appropriate party at the
address specified below:
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If to the Purchaser, to:
Libbey Inc.
c/o Director of Corporate Business Development
300 Madison Avenue
Toledo, OH 43604
If to the Seller, to:
BSN Glasspack N.V.
c/o Rene Leenders
Buitenhavenweg 116
3113 BE Schiedam, The Netherlands
or to such other addressee as the addressees above shall indicate to the
other Parties in accordance with the provisions of this section.
11.8. Costs. Unless otherwise stipulated herein, each Party shall be
responsible for the payment of all fees and costs incurred by it in
connection with this Agreement and the transactions contemplated hereby,
including the fees and disbursements of their respective financial
advisors, accountants and counsel.
11.9. No Waiver. The failure to exercise or delay in exercising a right or
remedy under this Agreement shall not constitute a waiver of the right or
remedy or a waiver of any other rights or remedies and no single or
partial exercise of any right or remedy under this Agreement shall
prevent any further exercise of the right or remedy or the exercise of
any other right or remedy.
11.10. Governing Law. This Agreement shall be governed by the Laws of
Belgium.
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Done in Brussels, on December 31, 2002 in 4 original copies.
BSN GLASSPACK N.V.
by: /s/ Jean-Yves Schapiro
----------------------------------
Jean-Yves Schapiro
Duly authorized
SAXOPHONE B.V.
by: /s/ Mark E. Songer
----------------------------------
Mark E. Songer
Attorney-in-fact
59