Exhibit 3
ASSOCIATION AGREEMENT
for the organization of
ENVASES CMF S.A.
among
CRISTALERIAS DE CHILE S.A.
CROWPLA REICOLITE S.A.
and
EMBOTELLADORA ANDINA S.A.
ANDINA INVERSIONES SOCIETARIAS S.A.
ENVASES MULTIPACK ▇.▇.
▇▇▇▇▇▇▇▇, June 29, 2001
ASSOCIATION AGREEMENT
ENVASES CMF S.A
This association agreement (hereinafter, the "Agreement") is being
entered into in Santiago, Chile, on June 29, 2001, among:
(1) CRISTALERIAS DE CHILE S.A., duly represented, as it shall be evidenced
below, by Messrs. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, national identity card number
3,958,417 - 4 and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, national identity card number
5,402,249 - 2, all domiciled at Hendaya 60, Floor 2, Las Condes County,
hereinafter also referred to as "CRISTALERIAS";
(2) EMBOTELLADORA ANDINA S.A. and ANDINA INVERSIONES SOCIETARIAS S.A., both
duly represented, as it shall be evidenced below, by Messrs. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, national identity card number 5,894,661 - 3 and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Doxrud, national identity card number 5,271,756 - 6, all domiciled for
these purposes in Santiago at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇▇▇ County, hereinafter also referred to as "ANDINA";
(3) CROWPLA REICOLITE S.A., duly represented, as it shall be evidenced below,
by Messrs. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Costabal, national identity card number
5,894,575 - 7 and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, national identity card
number 9,982,226 - 0, all domiciled at La ▇▇▇▇▇▇▇ 0390, Loteo Industrial
San ▇▇▇▇▇, Pudahuel County, Santiago, hereinafter also referred to as
"Crowpla"; and
(4) ENVASES MULTIPACK S.A., duly represented, as it shall be evidenced below,
by Messrs. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Ripamonti, national identity card number
7,017,242 - 9 and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, national identity card number
5,386,375 - 4, all domiciled for these purposes in Santiago at ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ County, hereinafter also referred
to as "Multipack".
For purposes of this agreement. ANDINA and CRISTALERIAS shall also be
referred to, collectively, as the "Parties", and individually, each as a
"Party".
In turn, Multipack and Crowpla shall also be collectively referred to as
the "Affiliates".
ARTICLE I
BACKGROUND
WHEREAS:
(1) on May 29, 2001, ANDINA and CRISTALERIAS executed a letter of intent
(the "Letter of Intent") which established the basis for a joint venture
or association in connection with their respective plastic container
businesses, through the consolidation of their respective operational
affiliates, Multipack and Crowpla. (hereinafter, the "Business");
(2) the objective of the association shall be to produce all types of
bottles and plastic containers (including their pre-forms), both
non-disposable and disposable, particularly starting from the resin
denominated PET (tereftalate of polyethylene);
(3) pursuant to the Agreement, ANDINA and CRISTALERIAS wish to ratify the
terms of the Letter of Intent and to set forth the rights and obligations
of the Parties, not only with respect to the above-mentioned joint
venture, but also with respect to the assets of the Affiliates which
shall be contributed or delivered to it;
(4) the consolidation of the businesses shall take place through Crowpla
(hereinafter, also, in addition to "Crowpla", the "Company"), whose name
shall be changed to ENVASES CMF S.A., or any other
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name that may be mutually agreed upon by the Parties (hereinafter, once
the Business has been perfected, "CMF");
(5) it is an essential condition of the Agreement that CRISTALERIAS
agrees to hold harmless ANDINA from any contingency, loss, claim, damage
or harm arising out of Crowpla or the assets contributed by Crowpla to
the Business arising out of activities prior to this Agreement;
(6) amendments in the by-laws shall be agreed upon and capital increases
be made(through the contribution of cash, like-kind and goods) in the
Company, in the manner set forth in thisAgreement, in such a manner as to
reflect the contributions that shall be made by the Parties and their
respective political and economic rights, once the Business has been
perfected; and
(7) as a result of the contributions in cash, like-kind and goods to be
made by the Parties according to the terms and conditions set forth in
this Agreement, as of the Date of the Closing (as hereinafter defined),
ANDINA and CRISTALERIAS shall each hold 50% of the total shares issued by
CMF.
NOW, THEREFORE, in consideration of the mutual representations,
guarantees, pacts and agreements herein, and in accordance with the terms and
conditions set forth below, the parties hereby agree as follows:
ARTICLE II
VALUATION, CONTRIBUTIONS AND STRUCTURE
For all purposes of this Agreement, the Parties hereby agree and
undertake to carry out the Business in accordance with the valuation,
contributions and structure indicated below, which shall be considered as a
single, unique and indivisible whole.
2.1 Values:
(a) The Parties hereby agree that Crowpla shall be the recipient of the
Net Worth Value of the Parties' respective containers businesses, and such
businesses shall be consolidated in Crowpla. This consolidation and the even
apportionment of the corporate rights, both political and economic, shall be
effected as if the consolidation of the Affiliates' containers businesses was
a merger of companies, and the consolidation will be based on the valuations
that are indicated below in Article II.
(b) The values associated with Multipack, its denomination, the
abbreviation (which shall be used as reference values for this Agreement and
to determine ANDINA's contribution to the Business) are the following:
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VALUE ABBREVIATION AMOUNT
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Economic Value of the
Multipack Business = VE (M) = US$ 39,72 million
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Excluded Asset Value
(present real Property
of Multipack) = VAE (M) = US$ 2,87 million
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Multipack's Net Worth = VP (M) = VE (M) - VAE (M)
VP (M) = US$ 36,85 million
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Capital Increase Value Andina = VAC (A) = See item 2.3 (b) (ii) below
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(c) The values associated with Crowpla, its denomination, the
abbreviation (which shall be used as reference values for this Agreement and
to determine CRISTALERIAS' contribution to the Business) are the following:
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VALUE ABBREVIATION AMOUNT
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Economic Value of the Crowpla
Business = VE (C) = US$ 24,92 million
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Crowpla's Financial Debt = DF (C) = US$ 6,09 million. This amount
(corresponds to all the is an estimated value in
liabilities of Crowpla accruing accordance with the financial
interest as of May 31, 2001 statements of Crowpla as of
May 31, 2001 and shall give
origin to a difference defined
as DIF (C) below, which shall
take into account the
variation of this parameter
since May 31, 2001 to June 30,
2001.
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Additional Asset Value of = VAA (C) = US$ 0.8 million (1)
Crowpla (land adjacent to its
present plant, the "Land")
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Working Capital Excess Value = VECT (C) = US$ 4.67 million. This amount
of Crowpla (corresponds to the is an estimated value according
working Capital that exceeds to the financial statements of
US$ 3.00 million) Crowpla as of May 31, 2001 and
shall give origin to a
difference defined as DIF (C)
below, which shall take into
account the variation of this
parameter from May 31, 2001
until June 30, 2001
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Net Worth of Crowpla = VP (C) = US$ 24.3 million. This amount
VE (C) - DF (C) is an Estimated value
+ VAA (C) + VECT(C) according to the Financial
statements or Crowpla as of
May 31, 2001 and shall give
origin to a difference defined
as as DIF (C) below, which
shall take into account the
variation of this parameter
from May 31, 2001 until
June 30, 2001.
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Capital Increase Value = VAC (C) = See 2.3 (b) (i) below
Cristalerias
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Financial Debt of Crowpla = DF (PW) = See Article V for determination
as of June 30, 2001 as of Financial Statement of
determined by Closing
Pricewaterhousecoopers,
pursuant to Article V.
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Working Capital Excess = VECT (PW) = See Article V for the
Value of Crowpla (in determination of Financial
excess of 3.0 million) Statement of Closing
as of June 30, 2001 as
determined by
Pricewaterhousecoopers,
pursuant to Article V.
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Capital Increase Difference = DIF (C) = [ (DF (PW) - DF (C) -
of Cristalerias (VECT (PW) - VECT (C) ) ]
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(d) The Parties hereby agree that, except as indicated in this Agreement,
there shall be no subsequent adjustments to the values determined above and
which are indicated in subparagraph (b) and (c) above. The values shall
correspond to the payment of any tax either present or future derived from the
transaction or the payment of the values thereof, with the exception of the
income tax that may be generated by the Parties.
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2.2 Date of the Closing
(a) Subject to compliance with or the waiver of the conditions set forth
in Section 2.6 of this Agreement, the closing (and related organization of the
Business) shall take place on June 29, 2001 (the "Date of the Closing" or the
"Closing").
(b) The Closing shall take place at the offices of Embotelladora Andina
S.A., located at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
(c) The Chilean Peso/U.S. Dollar exchange rate at which currency
transactions shall take place in accordance with this Agreement shall be the
exchange rate referred to in Chapter I Number 6 of the Compendium of Foreign
Exchange Rules of the Central Bank of Chile and published by the Central Bank
on June 27, 2001, which was CH$ 623.19 (six hundred twenty-three pesos and
nineteen cents) per U.S. $1.00.
2.3 Structure and Capital Increases
(a) Either simultaneously or subsequent to the execution of this
Agreement on the Date of the Closing, the Parties agree to commence the
preparation and undertake to enter into the contracts and agreements which may
be necessary for the performance of the Business in accordance with the values
set forth in Section 2.1 above, and, on the basis of the structure explained
below.
(b) CRISTALERIAS and Crowpla undertake that the latter, prior to or on
the Date of the Closing, shall hold a special shareholders' meeting (the
"Meeting"), the purpose of which is to increase the capital of Crowpla (the
"Capital Increases") in accordance with the terms below and to amend Crowpla's
by-laws in accordance with the terms below:
(i) An issuance of 1,000 shares for the amount resulting from the
addition of the values of VAC (C) defined in 2.1(c), whose product
is the amount indicated in the formula of the following paragraph,
plus the amount of US$ 800,000 (eight hundred thousand), which shall
be subscribed for and paid for by CRISTALERIAS (hereinafter, the
"CRISTALERIAS' Capital Increase"), by means of a share subscription
agreement executed on the date hereof.
The value of the contribution referred to above as ("VAC (C)") to be
effected by CRISTALERIAS in CMF, expressed in millions of Dollars,
shall be equal to:
VAC (C) = US$ 6.27 million (2)
Which amount derives from:
-----------------------------------
VAC (C) = [VP (M) - VP (C) ] / 2
Notwithstanding the foregoing, it is expressly acknowledged that the
values indicated above have been calculated in accordance with the
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financial statements of Crowpla as of May 31, 2001. The Parties
hereby agree that the final price per share of the CRISTALERIAS'
Capital Increase shall be determined by the Board of Directors of
CMF, and will be increased or decreased in accordance with the value
which is determined as DIF (C) explained in 2.1 (c) above. The Board
of Directors of CMF shall determine the final price per share and,
therefore, the value of the CRISTALERIAS' Capital Increase based
upon the results of the Report of PriceWaterhouseCoopers referred to
in Section V of this Agreement, or the award of the Conciliator, as
the case may be, within five business days from the date of issuance
of the relevant report.
(ii) A second issue of 28,000 shares for the equivalent of the amount
indicated or abbreviated as "VAC (A)" (hereinafter, the "Capital
Increase of ANDINA").
This Capital Increase of ANDINA shall be subscribed for and paid for
by ANDINA through an affiliate company it may designate, which is
100 % owned either directly or indirectly by ANDINA, and the per
share price shall be final. As a result of the above-referenced
Capital Increases, ANDINA and CRISTALERIAS shall be the only
shareholders in Crowpla, each one of them holding 28,000 shares
equivalent to 50 % of the shares subscribed for and paid for.
The value of the contribution to be made by ANDINA in CMF ("CIV
(A)") in the ANDINA's Capital Increase, expressed in millions of
Dollars, shall be equal to:
VAC (A) = VP (M) - VAC (C)
---------------------------------
as a result,
VAC (A) = US$ 30.58 million (3)
(iii) The amendment of the Crowpla by-laws that may be necessary in
accordance with this Agreement and the Shareholders Pact (referred
to in Section 2.6 (iii) of this Agreement), particularly the
increase in the number of directors and the new quorum requirements
set forth in said Pact.
(c) On the Date of the Closing, simultaneously with the Capital Increases
of ANDINA, CMF shall acquire from Multipack:
(i) all the fixed assets necessary to produce the indicated Net Worth
Value ["VP (M)"], including its auxiliary equipment and spare parts;
(ii) Working Capital (stock of raw materials, inventory of finished
products, unfinished products and accounts receivable) totaling US$
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3.92 million (collectively (i) and (ii) above are specified and
defined hereinafter as the "Multipack Assets"); and
(iii) Excluded from all the above is the real property and plant
currently being used by Multipack ("VAE (M)") (4) and all the other
assets which are detailed in (e) below.
(d) Consequently, the price that CMF shall pay Multipack for the assets
indicated in (c) (i) and (ii) above shall amount to US$ 36.85 million
(thirty-six million eight hundred fifty thousand). This amount shall be paid
by Crowpla to Multipack on the Date of the Closing, in cash.
(e) On the Date of the Closing, or no later than twenty (20) consecutive
days from the Date of the Closing, CMF shall acquire from Multipack the assets
that are detailed in Annex 4.3 to this Agreement, for a total of Ch$
875,340,351) (eight hundred seventy-five million three hundred forty thousand
three hundred fifty-one pesos).
(f) No later than ninety (90) days) from the Date of the Closing, the
Parties undertake to change the corporate name of Crowpla Reicolite S.A to
"ENVASES CMF S.A." or another name to be mutually agreed upon by the Parties.
At the special shareholders meeting discussing the name change, the Parties
undertake to agree upon a reduction in the number of shares issued pursuant to
the Capital Increases, so that after the reductions take place, the shares
already issued and the shares payable in cash to be issued by virtue of said
Capital Increases shall total 2,000 registered shares, of one series and
without par value, which shall be divided evenly between the Parties; and
(g) On the Date of the Closing, once the Capital Increases of
CRISTALERIAS have been accomplished, CMF shall acquire from CRISTALERIAS the
real property which is defined as VAA (C) under item 2.1 (c) above, free of
any mortgage, encumbrance and prohibition, for a value of US$ 800,000.
2.4 Other agreements with respect to the Capital Increases
(a) In consideration of the subscription of the Capital Increase of
ANDINA, CRISTALERIAS agrees to waive in favor of ANDINA the preemptive rights
it would have in Crowpla, so that, once the acts and contracts referred to in
this Agreement have been fulfilled, the capital of CMF will be evenly divided
between ANDINA and CRISTALERIAS.
(b) The transfer of the certificates of title in CMF to the Parties shall
be made by means of the delivery, on or before the Date of the Closing, of the
certificates evidencing the Capital Increase.
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(c) The Meeting shall approve the new composition of the Board of
Directors, which shall be formed by Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Doxrud, appointed by ANDINA, and Messrs.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
appointed by CRISTALERIAS.
(d) In accordance with the Letter of Intent, the Parties agree that
should CMF receive bank financing prior to the completion of the Capital
Increases, the contributions of each one of the Parties contributed to said
Capital Increases indicated in Section 2.3 (b) (i) and (ii), shall be reduced
in an amount equivalent to 50 % of the financing obtained; all that, after
payment of the debt that Crowpla maintains with CRISTALERIAS prior to the Date
of the Closing.
If said bank financing for CMF is obtained after the Capital Increases
have been issued, the Parties hereby agree that CMF shall effect a capital
decrease in such a manner as to diminish the investment of both Parties, in an
amount equal to said indebtedness or external financing, divided evenly
between CRISTALERIAS and ANDINA; all that, after payment of the debt that
Crowpla maintains with CRISTALERIAS prior to the Date of the Closing.
2.5 Other contracts and agreements
(a) An integral part of the association shall be the acts and contracts
necessary for the formation of the Business and what is indicated in Article
II.
(b) Among other things, and without limitation, the Parties undertake to
enter into, prior to or on the Date of the Closing: (a) the Shareholders Pact
referred to in Section 2.6 (iii) of this Agreement; (ii) the asset purchase
agreements (referred to in letters (c), (d), (e) and (g) of Section 2.3 of
this Article II; and, the other contracts and acts that fulfill the conditions
indicated in Section 2.6 of this Agreement.
(c) Upon completion of the foregoing, the Parties agree that CMF shall
execute on the Date of the Closing, the supply agreements with ANDINA and with
its affiliate, Vital S.A., referred to in Section 2.6 (vi) of this Agreement.
(d) The Parties agree and undertake, upon the execution of this
Agreement, to make CMF responsible for the administration and the expenses
inherent to the marketing, management, maintenance, storage and dispatch of
the PET containers that Multipack must sell and/or deliver subsequent to the
Date of the Closing. This shall be done through the reimbursement by CMF for
the expenses and direct costs that Multipack incurred as a result of the
contribution of assets to CMF and termination of its operations as a supplier
of containers. Such expenses and costs include, without limitation, costs
incurred to terminate labor contracts, indemnify its personnel, and other
costs directly related to the success of the Business.
(e) CMF shall offer to those Multipack employees necessary for the
operation of the Business, positions with CMF, acknowledging their seniority
and benefits received from Multipack, with the exception of pending vacation
leaves they may have accumulated.
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(f) The Parties agree and undertake to have CMF and Multipack execute all
necessary and applicable documents for CMF to assume every and each type of
outstanding contracts, agreements and understanding with third parties
executed by Multipack, directly or indirectly related to the business of
containers. CMF assumes, in its capacity as assignee, all the rights and
obligations of Multipack under said contracts, agreements and understandings.
A list of the contracts and agreements that shall be assumed by CMF are
detailed in Annex 2.5 of this Agreement.
2.6 Conditions for the Closing
Prior to or on the Date of the Closing, the Parties have complied with
(or obtained a waiver from the Party benefited therefrom), each one of the
following Conditions:
(i) The representations and warranties of the Parties contained in this
Agreement shall be correct as of the Date of the Closing, in all
material respects; and comply with all the stipulations set forth in
this document that the Parties must carry out on, or prior to, or
commencing from, the Date of the Closing.
(ii) As of the Date of the Closing there shall be no demand,
investigation, action or other material proceeding, either actual or
pending, against CRISTALERIAS, ANDINA, Crowpla or Multipack, before
any court or administrative instance that, in the reasonable opinion
of counsel to either Party, may result in a restriction or
prohibition from entering into the Business, or in the acquisition
of an indemnity against any of the Parties in connection with this
Agreement, or in the formation of the transactions contemplated in
this Agreement.
(iii) On the Date of the Closing, and as a condition to the formation of
the Business in accordance with this Agreement, CRISTALERIAS and
ANDINA shall have to execute a Shareholders Pact which is attached
to this Agreement as Annex 2.6.
(iv) As of the Date of the Closing, the Board of Directors of Crowpla
shall be formed by 6 members: three of who shall be designated by
CRISTALERIAS and the remaining three shall be designated by ANDINA.
(v) That Crowpla maintains in effect a contract for the supply of
containers and pre-forms with Embonor S.A. and its affiliate
companies, in form that is acceptable to ANDINA, which guarantees to
Crowpla (and consequently to CMF) the right to provide a permanent
and constant supply of containers and pre-forms to Embonor S.A., for
a period of no less than 10 years from October 1, 1997, with a
return of 15% on the investment necessary to produce the containers
and pre-forms.
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(vi) That CMF shall have entered into, on the Date of the Closing, the
PET Container Supply Agreements with ANDINA (for OW and REF-PET) and
with its affiliate company Vital S.A. (for OW) that guarantees to
ANDINA the maintenance of a permanent and constant supply of
containers, for a period of no less than 7 years.
(vii) The granting of any authorization that may be necessary for the
execution of this Agreement, of the other agreements indicated in
this Agreement or for the transfer of any property among the Assets
of Multipack and the Assets of Crowpla (as these terms are defined
below).
2.7 Conditions Subsequent to the Closing
(a) The Parties agree that subsequent to the Closing, Multipack agrees to
assign to CMF the licenses to: (i) produce REF - PET, granted by Continental
Pet Technologies Inc. (hereinafter, "CPT") to The Coca-Cola Company
(hereinafter, "TCCC") and sublicensed by the latter to Multipack, and (ii)
produce PET Containers with Multilayer technology granted by CPT to Multipack;
on substantially the same terms and conditions maintained by Multipack
(including its accessory agreements and understandings).
(b) The foregoing is also valid for the assignment of the lease agreement
of the injection moulds of preforms for REF - PET owned by Coca Cola Chile
S.A. in favor of Multipack, which shall also have to be transferred (together
with the assignment of the sublicense of subparagraph a) (i) above), to be
used by CMF in substantially the same terms and conditions granted by Coca
Cola Chile S.A. to Multipack (including its accessory agreements and
understandings).
(c) It is expressly acknowledged that both CPT and TCCC have given their
approval in principle to this association, as it appears from the letters that
are attached as Annex 2.7 to this Agreement. In addition, the Parties agree
that in order to materialize the foregoing, among other things, a letter
substantially in the form of the draft enclosed in said Annex 2.7 shall be
sent to Coca Cola de Chile S.A.
(d) The Company shall have to assume the responsibilities and obligations
under all the services and supply contracts regarding inputs and raw materials
that Multipack may have outstanding as of the Date of the Closing, which are
detailed in Annex 2.5.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CRISTALERIAS
By virtue of this Agreement, CRISTALERIAS hereby represents, warrants and
assumes responsibility to ANDINA that, as of the date hereof:
3.1 Powers and Authority
(a) CRISTALERIAS and Crowpla are corporations duly organized and validly
existing under the laws of the Republic of Chile; and have the power and
authority
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required, corporate or otherwise, to enter into and execute this Agreement and
materialize the transactions and perform the legal acts contemplated herein.
This Agreement is duly and validly executed by CRISTALERIAS and Crowpla, and
represents a valid, binding and enforceable obligation in accordance with its
terms.
(b) The entering into and execution of this Agreement by CRISTALERIAS and
Crowpla, and the materialization of the transactions contemplated herein: (i)
neither infringe upon nor shall infringe upon any provision contained in a
law, statute, rule or regulation to which CRISTALERIAS or Crowpla may be
subject; (ii) neither violate nor shall violate any order, ruling or decree
applicable to CRISTALERIAS or Crowpla; or (iii) neither infringe upon nor
shall infringe upon, be in conflict or produce the violation or non-compliance
(or shall cause the lapse of a term or the compliance with a condition
subsequent or the termination) of a contract, agreement, document, instrument
or order of a court to which either CRISTALERIAS or Crowpla is a party or by
which either CRISTALERIAS or Crowpla or their assets may be bound.
3.2 Ownership of the Shares
CRISTALERIAS has a good, valid and marketable title and a full property
right, direct and indirect, with respect to the totality of the shares issued
by Crowpla - including those resulting from the Capital Increase -
(hereinafter, the "Shares"). In turn, the Shares: (i) are valid and fully
issued, subscribed for and paid for, and free from any encumbrance, pledge,
attachment or prohibition, and (ii) are as of this date, and shall be as of
the Date of the Closing, free from any pledges, restrictions, claims, liens,
options, preferred rights or encumbrances. CRISTALERIAS has an exclusive
right, power and authority to exercise the voting rights pertaining to the
Shares. CRISTALERIAS is not a party, nor is obligated by any type of contract,
agreement or understanding affecting or related to its right to freely dispose
of the Shares or to exercise its voting rights with respect thereof.
3.3 Organization
(a) CRISTALERIAS and Crowpla have all requisite power and authority,
corporate or otherwise, to carry out and conduct their business activities in
the manner in which they are being presently conducted, and to own or lease
their respective properties and assets.
(b) Crowpla has neither any affiliated or colligated companies nor any
direct or indirect participation in any other joint stock corporation, limited
partnership, association or other sort of legal entity.
(c) The copies of the organizational instruments, by-laws or any other
corporate instruments or documents of the Company have been legally executed
and in accordance with their terms; and, as a result, said organizational
documents are complete, accurate, correct and in effect as of the date hereof;
and, they reflect all the transactions of Crowpla that must be contained in
said corporate documents, its minutes and registries.
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(d) The current directors of the Company are those indicated in Annex 3.3
hereto. It is hereby declared that said directors of Crowpla, on or prior to
the Date of the Closing, shall have submitted their resignations and it is
hereby guaranteed that no amount whatsoever is owed to them on account of fees
or in any other respect.
3.4 Authorized and outstanding equity capital
(a) The authorized equity capital of Crowpla, as of December 31, 2000
totaled Ch$ 9,459,114,585, and the number of shares issued, subscribed for,
paid and outstanding thereof is 20,332 shares. This capital, prior to the
Capital Increases referred to in Section 2.2 of this Agreement, was increased
by virtue of the provisions in Section 10 of Law No. 18,045 in the sum
of Ch$ 10,572,013,892, divided into 27,000 shares, fully subscribed for and
paid for.
(b) Crowpla does not have additional shares outstanding or issued, or to
be issued, paid or to be paid, or subject to an obligation to be subscribed
for, option, purchase or sale; or to a requirement, commitment or agreement
requiring that Crowpla shall issue new shares or grants rights to a third
party or others to acquire any additional share in the capital of Crowpla or
any other equity security (including any right of conversion or exchange
pursuant to any outstanding document or other instrument).
(c) All the issues, transfers, purchases or redemption of the equity
capital of Crowpla have complied with all the contracts and with all
applicable laws, including the Securities Act. Likewise, all taxes and other
costs and expenses with respect to said transactions have been duly paid.
(d) Crowpla has no existing obligation to repurchase, redeem or acquire
any outstanding share of the equity capital of Crowpla. There are no shares of
the equity capital maintained in the treasury of Crowpla.
3.5 Transfer Claims
No transaction of any nature or type whatsoever with respect to the
equity capital of Crowpla (including shares, options, or convertible debt,
options or warrants), has given or shall give rise to a claim or action on the
part of any third party (including, without limitation, any current or prior
owner of any of the Shares or any other equity capital of Crowpla) which may
be enforceable against Crowpla, CRISTALERIAS or ANDINA.
3.6 Financial Statements
(a) Annex 3.6 contains the audited balance sheet and complete financial
statements of Crowpla as of December 31, 2000, with related notes. These
documents, together with the balance sheet and the financial statements that
shall be prepared in accordance with the provisions in Article V of this
Agreement, shall hereinafter collectively referred to as the "Financial
Statements".
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(b) The Financial Statements are accurate, correct and complete, and
correctly present the financial condition for the year or period ended as of
their respective dates. There are no liabilities which are not reflected in
the Financial Statements or contingencies that may generate current
liabilities for which there are no allowances or with respect to which the
existing allowances may prove to be insufficient, and there is no Asset of
Crowpla not disclosed in the indicated Financial Statements. The Financial
Statements are based on the books and registries that have been maintained by
Crowpla, and said Financial Statements have been prepared in accordance with
the rules issued by the Superintendency of Securities and Insurance and the
principles of accounting accepted generally and consistently applied in Chile
(hereinafter these rules and principles of accounting to be referred to as
"Chilean GAAP").
(c) Crowpla has not made any change in a method of accounting, or any
material practice or principle of Chilean GAAP.
3.7 Non-existence of Undeclared Liabilities
Except to the extent reflected and adequately provided for in the
Financial Statements or as indicated in Annex 3.7 to this Agreement, as of
June 29, 2001 Crowpla does not have any liability or obligation, whether
accumulated, absolute, contingent or otherwise. In addition, since January 1,
2001, Crowpla has not incurred any liability or obligation, except for the
liabilities and obligations incurred by it in the ordinary course of its
business, compatible with prior practice, all of which have been reflected in
notes to its Financial Statements or, in the absence thereof, indicated in
Annex 3.7.
3.8 Compliance with the Laws
With the exception of what is indicated in Annex 3.8, Crowpla has not
breached, either through action or omission, any obligation under any contract
to which it is a party; or any applicable law, ordinance, regulation, order or
municipal decree, not barred by the statute of limitations (including, without
limitation, any tax, customs, environmental or antitrust law or regulation);
or has been in non-compliance with any other requirement of any governmental
authority or court which is binding upon it, or that may affect its
properties, businesses, policies regarding advertising, sales or prices.
3.9 Properties
(a) Annex 3.9 contains a full and accurate description of all the real
properties and an inventory of the tangible personal properties that form the
fixed assets of Crowpla, which as of June 29, 2001 are owned, possessed or
leased by Crowpla; or that it has agreed to (or has an option to do so)
purchase, sell or lease.
(b) With the exception of what has been set forth in Annex 3.9, Crowpla:
(i) has a legal, full, absolute and unconditional title to all its real
properties (including the property that was or shall be purchased by CMF to
CRISTALERIAS with funds raised from the Capital Increase, in accordance with
the provisions in 2.3 (g) above, and has a valid legal title with respect to
all its properties and assets which it represents to be the
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owner or possessor of, whether personal or real, tangible or intangible,
including all the properties, goods and assets both personal and real
reflected in the Financial Statements (with the exception of the inventories
and assets sold or permitted to be sold prior to the Date of the Closing in
the ordinary and normal course of its business, consistent with prior
practice; and the supplies used in the ordinary course of its business, all of
these hereinafter also the "Assets of Crowpla"); and (ii) with the exception
of the "Permitted Liens" (as defined below), Crowpla possesses said Assets of
Crowpla free of hidden vices, defects - except for the wear and tear
originated from their use in the ordinary and normal course of business - or
attachments, pledges, mortgages, claims, charges, participation, usufructs,
use or housing rights, easements or other liens or restrictions of any nature
whatsoever, including leases, conditional sale contracts or other that imply
the withholding of properties or limitations on the rights of use, enjoyment
and disposition of the Assets of Crowpla.
The "Permitted Liens" means exclusively the mortgages, guarantees,
statutory pledges, easements, usufructs, use or housing rights, preventive
measures, withholdings, attachments or other liens, guarantees described in
Annex 3.9.
(c) All the Assets of Crowpla are in its possession and under its
control, and no other person has a right to the possession of any of said
Assets of Crowpla.
(d) With the exception of what is set forth in Annex 3.9, no real
property owned by Crowpla or leased by Crowpla is subject to: (i)
expropriation, retention, attachment, condemnation, is the subject matter of
an injunction or sale by public authority or by decree or governmental order;
or (ii) easement or restrictions of any nature whatsoever.
(e) To the best of its knowledge, CRISTALERIAS believes that the
factories, plants, structures and equipment owned by Crowpla, or leased by it,
have been constructed in accordance with the applicable rules currently in
force, without material defects, are in good operational and maintenance
condition and are adequate for the use for which they are intended, taking
into consideration ordinary wear and tear due to normal use.
(f) The Assets of Crowpla owned, leased or granted under concession to
Crowpla include as of June 29, 2001 date all the rights, properties and other
assets that: (i) are necessary to allow Crowpla to conduct its operations in
the same manner as it has conducted its business since December 31, 2000,
without necessitating replacement or repairs other than in the ordinary course
of its business; and (ii) serve as the basis for the determination of the
so-called "VE (C)" referred to in Section 2.1 (c) of this Agreement.
(g) All the inventories of Crowpla as of June 29, 2001 included in the
Financial Statements (which are indicated in Annex 3.9) are marketable and of
quality and quantity usable and salable in the ordinary and normal course of
business of Crowpla. The quantities of each type included in the inventory
(whether raw materials, semi-finished products, or finished products) are not
excessive, but reasonable, adequate and appropriate in the light of the
present Crowpla's circumstances. No inventory previously sold is subject to
restoration at levels above historical levels. All of Crowpla's inventory
included in the Financial Statements are valued, for the purposes of those
Financial Statements, in accordance with Chilean GAAP. There is no
investigation or administrative action pending
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by any governmental, municipal or foreign authority, which may affect the
inventories of Crowpla.
3.10 Leases
With the exception of what is set forth in Annex 3.10, Crowpla does not
have lease contracts (including any capital leasing) or leasing agreements
with a purchase option by which Crowpla may lease a property either real or
personal; and that (i) require that Crowpla pays, for rent or any necessary
improvements, an amount in excess of the equivalent of US$ 100,000 in any
given year or US$ 250,000 during the entire period of said lease contract
(including any extension that Crowpla may not renew at its sole discretion),
or that (ii) stipulate a purchase option for a price in excess to the
equivalent to US$ 250,000. All said leases are valid, binding and enforceable
in accordance with their terms and are currently fully in force and effect;
there are currently no defaults under the leases by either of the parties; and
there has occurred no event that may constitute and event of default in
accordance with their terms, either on the part of Crowpla or any other of the
parties.
3.11 Indebtedness, Passives, Debts and Loaned Money
Annex 3.11 contains a complete and correct list and description of all
the instruments and other documents related to any indebtedness, liabilities,
debts and obligations regarding money borrowed by Crowpla; as well as the
indebtedness by means of leasing contracts with a purchase option, guarantees,
commitments in which third parties may be based to grant loans and all the
conditional sales contracts, pledges and other guarantee agreements with
respect to the personal properties used by Crowpla or owned by it. No credit
owed by Crowpla stipulates a penalty or bonus for early payment and, should
there be any, they are specified in said Annex 3.11.
3.12 Intellectual Property
With the sole exception of its corporate name "Crowpla Reicolite S.A."
and what is indicated in Annex 3.12, Crowpla does not have other commercial
names, service marks, intellectual property rights, patents or applications to
obtain such rights, which are owned by Crowpla.
3.13 Litigation and Claims
Annex 3.13 contains a list of all the litigation, claims, demands,
actions, investigations, processes, or administrative, arbitration or other
proceedings of any type whatsoever against Crowpla, either pending or
threatened against it, including actions or proceedings originated from
product liability and labor demands, or that involve any of its assets or
businesses. None of the matters described in Annex 3.13 (individually or in
the aggregate) shall have or may have, should there be any, a material adverse
effect either in the business or financial condition of Crowpla, and
CRISTALERIAS is not aware of any
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reason that may cause it to fear such adverse consequence. In addition, with
the exception of what is set forth in Annex 3.13, there are no rulings,
orders, injunctions, instructions, resolutions, decrees or sentences issued
against Crowpla. No senior executive officer or present or former director of
Crowpla, has or shall have any claim seeking and indemnification against
Crowpla related to an act or omission prior to the date hereof on the part of
said executive officer or director.
3.14 Benefit Programs
(a) Except as set forth in Annex 3.14, there are no contracts,
agreements, commitments, policies or understandings, of any type whatsoever
(either oral or written), related to compensation, salaries or benefits;
and/or that constitute incentive policies or share plans, bonds, share option
plans with respect to the shares of Crowpla, purchases of shares or other
compensation commitments (all them hereinafter collectively referred to as the
"Benefit Programs".
(b) Should there exist or have existed Benefit Programs, with the
exception of what is set forth in Annex 3.14, (i) Crowpla (and its
shareholders), has complied with all its obligations related to all the
Benefit Programs, including the payment of all contributions owed, and (ii)
said Benefit Programs of workers, employees or executive officers (including
managers) of Crowpla (the "Employees of Crowpla") have been executed and
maintained in accordance with all the applicable statutes and regulations. The
levels of allowances, provisions, insurance and obligations accumulated with
respect to those programs are reasonable and sufficient to satisfy any claim,
with any type of retroactive adjustments.
(c) Except as described in Annex 3.14, Crowpla does not have any
agreement, contract, commitment or understanding, whether legally binding or
not, (i) to create an additional Benefit Program for the Employees of Crowpla;
(ii) to increase the benefits or its contribution requirements for any of the
Benefit Programs (should there be any); (iii) to amend, change or terminate,
in any material respect, any existing Benefit Program; (iv) to have a
retirement plan in effect; and (v) to pay any indemnification over and above
the limits set forth by the laws.
3.15 Labor Contracts
With respect to the Employees of Crowpla, with the exception of what is
indicated in Annex 3.15, all of Crowpla's contracts are currently in force,
and there has been no increase in compensation or granting of benefits or
promises with respect to it. The foregoing considers all Employees of Crowpla.
In addition, Crowpla has fully complied with all its tax, labor and
retirement-related obligations with respect to every each and every one of its
employees.
3.16 Banking Accounts
Annex 3.16 sets forth a complete and accurate list of the banking
institutions with which Crowpla maintains either current or deposit accounts.
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3.17 Environmental Protection, Rules and Other Registers
(a) With regard to the pollution or protection of the environment, with
the exception of what is set forth in Annex 3.17, Crowpla has complied with
all requirements, both in form and substance, established by the sanitary and
environmental rules applicable to its business and has all the necessary
permits, licenses and other authorizations that are required for the operation
of its business.
(b) Except as indicated in Annex 3.17, there is no claim or complaint or
any other action instituted against Crowpla for violation of an environmental
rule, either pending or that, in the knowledge of CRISTALERIAS, may be
instituted before a court of law or other authority. In addition, there is no
basis, cause or fact whatsoever for a claim, which Crowpla or CRISTALERIAS may
be aware of.
3.18 License Agreements
Annex 3.18 sets forth a complete and accurate list and description of all
the license agreements pursuant to which Crowpla conducts its business.
3.19 Insurance Policies
Annex 3.19 sets forth a complete and accurate list and description of all
the insurance policies currently in effect for Crowpla, or for which Crowpla
has paid or is obligated to pay all or part of the premiums. With the
exception of what is stipulated in Annex 3.19, it is hereby represented and
warranted with respect to the insurance policies of Crowpla that: (i) they are
currently in force and that the relevant payments of premiums are up to date;
(ii) that there has been no act or omission whatsoever on the part of any
person who is an employee of Crowpla by virtue of which any of those policies
could be terminated or be rescindable in whole or in part; (iii) that there is
no pending claim whatsoever and there has occurred no fact whatsoever that has
resulted or may result in a claim under any of those policies; and (iv) that
in Crowpla's opinion, the policies are adequate to provide coverage for the
risks reasonable foreseen in connection with the business and all the Assets
of Crowpla. It is hereby expressly acknowledged that the representation
contained in (iv) above shall cease to be in effect once the management of CMF
shall have submitted to the Board of Directors, as designated in accordance
with the provisions in Section 2.6 (iv), its evaluation of the policies of
insurance included in the Business, within 10 business days of the Date of the
Closing.
3.20 Supplier and Main Clients
Except as set forth in Annex 3.20, Crowpla is not a party to any dispute
with any of its suppliers or main clients. CRISTALERIAS and Crowpla are not
aware as of the date hereof, that the materialization of the transactions and
acts contemplated in this Agreement, have or shall have an adverse effect on
Crowpla's commercial relationships with any of such suppliers or clients.
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3.21 Contracts and Commitments
(a) For the purposes of this Clause, "Agreement" means any contract, act,
convention, undertaking, promissory note, debt instrument, commitment,
obligation or understanding of any nature whatsoever, either oral or written,
to which Crowpla may be a party to or be obligated under, or to which Crowpla
or the Assets of Crowpla are subject, including, without limitation, each and
every amendment, modification or supplement to any of them.
(b) Except as set forth in Annex 3.21 and in the above-mentioned Annex
3.15:
(i) Crowpla does not have any outstanding Agreement, either oral or
written, with any officer, employee, agent, consultant, advisor,
salesman, manufacturer's representative, distributor, merchant,
subcontractor or broker that Crowpla may not terminate with a 90-day
prior notice, without responsibility or penalty of any nature
whatsoever therefor;
(ii) Crowpla does not have any Agreement whereby products that may be
returned (in the event they have not been sold) to Crowpla would
have been supplied to third parties, and that could imply a
responsibility or obligation of Crowpla in excess to the equivalent
to US$ 100,000; and
(iii) Crowpla is not a party to any Agreement which contains pacts that
restrict the freedom of Crowpla to compete in any line of business
in any geographical area or pursuant to which Crowpla shall be
required or obligated to share any profits.
3.22 No Conflicts
The execution and delivery of this Agreement by CRISTALERIAS and Crowpla,
the materialization of the contracts, acts and transactions contemplated
herein on the part of same, and the performance of the pacts and agreements of
CRISTALERIAS and Crowpla contained in this Agreement (with or without notice
or the lapse a term, or both):
(i) shall not result in the violation of or conflict with any of the
provisions contained in the organizational instruments, or other
corporate document or by-laws of Crowpla;
(ii) with the exception of the stipulations contained in Annex 3.22,
shall not result in the violation of, conflict with or produce the
effect of a violation or non-compliance with, or cause the annulment
or acceleration of any term or condition of any mortgage, deed,
contract, license, permit, instrument, trust deed or other Agreement
to which Crowpla is a party or by which Crowpla (or its respective
properties) may be bound;
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(iii) it shall not result in the violation of any provision contained in
a law, statute, rule; or,
(iv) shall not result in the creation or imposition of a pledge, claim,
charge, prohibition, lien or restriction of any type whatsoever with
respect to any of the Assets of Crowpla.
3.23 Contracts in Full Force and Effect
All the Agreements, understandings, plans, leases, policies and licenses
mentioned, or that are required to be mentioned in any Annex to this
Agreement, are valid and binding; and are presently in full force and effect,
and are enforceable in accordance with their respective terms. Crowpla does
not have knowledge of any bankruptcy, insolvency or similar procedure pending
or threatened with respect to any of the parties to said Agreements and, as
far as it is aware of, no event that constitutes a default under their terms
on the part of Crowpla, or any of the other parties to said instruments, has
occurred.
3.24 Required Consents and Approvals
No consent or approval required to avoid the violation, infraction,
non-compliance or creation of pledge rights on the Assets of Crowpla under the
terms of any regulation, order, decree or sentence of a court or governmental
body, or under any lease, contract, mortgage, promissory note or any other
instrument to which Crowpla is a party or pursuant to which the Assets of
Crowpla or any of the Shares are obligated is required for the execution of
this Agreement or for the performance of any of the acts or the
materialization of any of the transactions contemplated herein.
3.25 Absence of Certain Changes and Events
Except as set forth in Annex 3.25 or the stipulations in this Agreement,
since January 1, 2001 Crowpla has conducted its business only in the ordinary
and normal course, and it has not:
(a) sustained any damage or destruction affecting in an adverse manner
the properties or the business of Crowpla;
(b) with the exception of the usual dividends, whose amount and
distribution dates are set forth in Annex 3.25), consistent with Crowpla's
historical corporate practices, there has been no declaration or payment of
any dividend or other distribution of assets (either in cash, shares or
like-kind) on the equity capital of Crowpla; or any redemption, purchase or
other direct or indirect acquisition of aid shares;
(c) experienced any material adverse change in its working capital,
assets, liabilities, financial condition, commercial projections or
relationship with any supplier or client;
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(d) incurred any responsibility or obligation (whether absolute,
accumulated, contingent or otherwise) other than in the ordinary and normal
course of its business;
(e) paid, complied with or satisfied any claim, responsibility or
obligation other than in the ordinary and normal course of its business;
(f) waived any claim or material right;
(g) sold, transferred or disposed of any of its assets (except as set
forth in Annex 3.15) or in the ordinary and normal course of its business;
(h) incurred any expense or made any capital investment in excess of the
equivalent to US$ 100,000 which is not contemplated in Crowpla's capital
budget for the fiscal year ending December 31, 2001 (provided for prior to the
association agreed upon pursuant to this Agreement);
(i) implemented any change in the method of accounting or any material
accounting practice or principle;
(j) paid, loaned or advanced any amount or asset, or sold, transferred or
leased any asset to any Employee of Crowpla, except for the normal
compensation represented by salaries and benefits and the advances granted in
the ordinary course of business; or
(k) entered into any contract or executed any material transaction that
may affect the operations of Crowpla, other than in the ordinary course of its
business.
3.26 Required Licenses and Permits
Crowpla has all the licenses, permits or other authorizations from
governmental authorities necessary for the manufacture and sale of its
products and all the other licenses, permits or other authorizations from
governmental authorities necessary for the conduct of its business.
3.27 Tax Matters
(a) Taxes. For the purposes of this Agreement, "Taxes" means all the
determinations on a taxable basis, such as levies, charges, duties, fees,
tariffs, tax impositions or other governmental charges (including interest,
penalties or additions related therewith), including without limitation income
taxes, net worth taxes, franchises, taxes on share capital, value added tax,
real property tax and/or personal property tax, transfer tax, excise tax,
services and consumption tax, and all the other taxes, charges and levies of
any type whatsoever, with respect to which Crowpla may have a obligation as
determined by Chile or by any other country or foreign government or agency
therein, whether it is under dispute or not.
(b) Filing of Tax Returns and Responsibilities. Except as informed in
Annex 3.27: It is hereby represented and warranted that: (i) all the financial
statements of Crowpla
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related to all the recently past fiscal years yet to be barred by the statute
of limitations, contain a provision or total reserve for all the Taxes and tax
obligations that may burden Crowpla or for which Crowpla may be considered
responsible for any past period not barred by the statute of limitations; (ii)
no Tax shall originate and shall be payable by Crowpla by virtue of this
Agreement; (iii) Crowpla has not performed any transaction or executed any
contract or agreement pursuant to which: (a) in its opinion it has been or may
be deprived of an indemnification otherwise available to it, or (b) it may
result obligated to any Tax or payment; (iv) Crowpla has filed all the
relevant tax returns and provided all the information to the tax authorities
and to any other relevant authority as required by Chilean law; (v) all the
tax returns, including the income tax and VAT, have been duly and timely
filed; (vi) all these tax returns and information have been correctly made and
they are not the subject matter of any notice, assessment or objection and
Crowpla has maintained and preserved the documentation upon which the tax
returns referred to above are based; (vii) Crowpla has timely paid every
direct and indirect Tax, including, particularly, the relevant VAT, municipal
permits and patents and real property taxes; (viii) Crowpla retains in its
possession all the invoices corresponding to local purchases and official
proof of the payment of Taxes and VAT corresponding to imports evidencing the
tax credit for VAT corresponding to each period not barred by the statute of
limitations, as well as of their due and timely application; and (x) in the
opinion of Crowpla, there are no facts existing or that may have existed,
which could constitute sufficient grounds for the determination of any Tax
with respect to the periods which have not been inspected by the Chilean
Internal Revenue Service, Customs of other tax authorities.
(c) Allowances. In each case, Crowpla has made appropriate allowances for
all its tax obligations accrued and deferred as of their respective dates with
respect to the transactions of the relevant periods, in accordance with
Chilean GAAP.
3.28 Accounts Receivable
All the accounts receivable of Crowpla owed by any director, officer,
shareholder or employee of Crowpla or any relative of said person (including
those accounts receivable reflected in the Financial Statements and incurred
prior to their respective dates) have been paid in full prior to the date
hereof.
3.29 Contingent Obligations
All the obligations and responsibilities of Crowpla incurred prior to the
Date of the Closing, relative to the operational results, whether declared or
not, as well as all the taxes related to the price-level restatement or
revaluation of assets incorrectly supplied to the tax authorities prior to the
date hereof, and for which no provisions have been duly made in the ad interim
Financial Statements, shall be the exclusive responsibility of CRISTALERIAS.
The amount of said contingencies designated by the Auditors shall be added by
CRISTALERIAS in the form of cash to Net Working Capital of Crowpla at the time
and in the event they become enforceable.
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3.30 Service and Product Guarantees
Except as set forth in Annex 3.30, with respect to any guarantee given by
Crowpla, there is no claim either pending or threatened which alleges an
infraction or breach of any guarantee or surety provided by Crowpla.
3.31 Agents' and Brokers' Fees
Neither Crowpla, nor CRISTALERIAS or any person acting on behalf of
either of them, has done anything that may generate an obligation with respect
to fees of brokers, intermediary financial agents or similar agents, with
respect to this Agreement or any other transaction contemplated herein.
Neither CMF, nor ANDINA, shall have any responsibility whatsoever for fees,
expenses or similar costs of third parties, with regard to this Agreement or
any of the transactions contemplated herein.
3.32 Sufficiency of Information
Each and every statement, warranty, promise or representation made by
CRISTALERIAS and Crowpla in this Agreement and every statement contained in
any document (including the Financial Statements and the Annexes),
certificate, document and other writ delivered or to be delivered by
CRISTALERIAS to ANDINA (or any of its representatives), in accordance with the
provisions in this Agreement, are complete, accurate and truthful and they do
not contain or shall not contain an erroneous or false statement with respect
to any material fact, nor do they fail to disclose or shall fail to disclose a
material fact, or omit to state or shall omit to state any fact necessary to
be stated in light of the circumstances under which they were made, making the
statement contained herein or therein materially misleading (i.e. statements
that adversely affect the Assets of Crowpla or the achievement of the Business
subject matter of this Agreement).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ANDINA
ANDINA and Multipack hereby represent, warrant and undertake to be
responsible to CRISTALERIAS and Crowpla as follows:
4.1 Powers and Authority
(a) Both ANDINA and Multipack are joint stock corporations duly organized
and validly existing under the laws of Chile; and have all the requisite power
and authority, corporate or otherwise, to conduct their businesses in the
manner in which they presently conduct it and to enter into and execute this
Agreement and materialize the transactions and legal acts contemplated herein;
as well as to carry out and conduct their businesses and to possess or lease
their properties and assets.
(b) This Agreement, its execution and performance has been duly
authorized in all the corporate instances of ANDINA and Multipack and is
within their respective corporate powers. This Agreement is duly and validly
executed by ANDINA and
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Multipack, and constitutes a legal, valid and binding obligation for each one
of them, and enforceable in accordance with its terms.
(c) The execution and performance of this Agreement on the part of ANDINA
and Multipack, and the materialization of the transactions contemplated
herein: (i) do not violate and shall not violate any provision of a law,
statute, rule or regulation by which ANDINA and Multipack may be obligated;
(ii) do not violate and shall not violate any order, ruling or decree
applicable to ANDINA and Multipack; or (iii) do not violate and shall not
violate, be in conflict with, or result in the infraction of or the
non-compliance with (or shall cause the lapse of a term or the compliance with
a condition subsequent or the termination) of a contract, agreement, document,
instrument or order of a court to which ANDINA or Multipack are parties or by
which ANDINA or Multipack or their respective properties may be obligated.
4.2 Fees of Brokers or Financial Agents
Neither ANDINA nor Multipack, or any person acting on behalf of either of
them, has done anything that may generate an obligation with respect to fees
of brokers, intermediary financial agents or similar agents, with respect to
this Agreement or any other transaction contemplated herein. Neither CMF nor
CRISTALERIAS shall have any responsibility whatsoever for fees, expenses or
similar costs of third parties, with regard to this Agreement or any of the
transactions contemplated herein.
4.3 Property
(a) Annex 4.3 sets forth an inventory of the tangible personal properties
that Multipack shall contribute or sell to the Business in accordance with the
provisions in Section 2.3 (c), (d) and (e) of Article II and which form part
of the fixed assets of Multipack, or that Multipack has agreed to (or has an
option to do so) purchase, sell or lease, as of June 29, 2001 (hereinafter the
"Assets of Multipack"), except for the inventories and assets sold or
permitted to be sold in the ordinary and normal course of Multipack's
business, consistent with past practices, and the supplies used in the
ordinary and normal course of its business.
(b) With the exception of what is set forth in Annex 4.3, Multipack has a
full, absolute and unconditional legal title with respect to all the Assets of
Multipack, free of vices, defects or objections (except for the wear and tear
derived from its use in the ordinary and normal course of Multipack's
business), pledges, mortgages, claims, charges, participation, usufructs, use
or housing rights, easements or other encumbrances or restrictions of any
nature whatsoever, including leases, conditional sale contracts or others that
imply the withholding of properties or limitations to the right of use,
enjoyment and disposal of the Assets of Multipack.
(c) The Assets of Multipack include as of this date all those rights,
properties and other assets that: (i) are necessary for Multipack to conduct
its operations in the same manner in which they have been conducted since
December 31, 2000, without necessitating replacement or repair other than in
the ordinary and normal course of its business; and (ii)
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served as the basis for the determination of the so-called "VP (M)" of
Section 2.1 (b) of this Agreement.
(d) The Assets of Multipack are in its possession and control, and no
other person has a right to possess any other of said Assets of Multipack.
(e) All the inventories included in the Assets of Multipack as of
June 29, 2001 are marketable and of a quality and quantity usable and salable
in the ordinary and normal course of business of containers. The quantities of
each type included in the inventory (whether raw materials, unfinished
products, or finished products) are not excessive, but reasonable, adequate
and appropriate in light of Multipack's present circumstances. No inventory
previously sold is subject to restoration costs which are considerably in
excess of those historically experienced by Multipack. There is no
investigation or administrative action pending on the part of any
governmental, municipal or foreign authority, which may affect the inventories
of Multipack.
4.4 Non-existence of Undeclared Responsibilities
Except as indicated in Annex 4.4 to this Agreement, as of June 29, 2001
neither ANDINA nor Multipack have incurred any obligations with respect to the
Assets of Multipack in any responsibility or obligation to third parties which
implies a lien on those assets or a restriction on their use, except for the
responsibilities and obligations incurred by Multipack in the ordinary and
normal course of its business, consistent with past practices.
4.5 Intellectual Property
With the sole exception of its corporate name "Envases Multipack S.A."
and what is otherwise set forth in Annex 4.5, Multipack does not have other
commercial names, service marks, intellectual property rights, patents and
applications to obtain such rights, which are owned by it.
4.6 Compliance with the Laws
With the exception of what is indicated in Annex 4.6, ANDINA or Multipack
have not breached, either through action or omission, or been in
non-compliance with any obligation under a contract to which it is a party; or
is in violation of any applicable law, ordinance, regulation, order or
municipal decree, not barred by the statute of limitations (including, without
limitation, any tax, customs, environmental or antitrust law or regulation)
that may affect the Assets of Multipack; or is in non-compliance with any
other requirement of any governmental authority or court which is binding upon
it; in each case that may materially and adversely affect the Assets of
Multipack.
4.7 Litigation and Claims
(a) Annex 4.7 contains a list of all the litigation, claims, demands,
actions, investigations, processes, or administrative, arbitration or other
proceedings of any type
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whatsoever against Multipack, either pending or threatened against it,
including actions or proceedings originating from product liability and labor
demands, or that involve: (i) any of the Assets of Multipack; (ii) the
Employees of Multipack (as defined below); (iii) the contracts of Multipack
assumed by CMF in accordance with the provisions in Section 2.5 (e); and (iv)
any matter that could affect CMF as successor to the business of Multipack.
(b) None of the matters described in Annex 4.7 (individually or in the
aggregate) shall have or may have, should there be any, a material adverse
effect on either the business or financial condition of CMF, and ANDINA is not
aware of any reason that may cause it to fear such adverse consequence. In
addition, with the exception of what is set forth in Annex 4.7, there are no
rulings, orders, injunctions, instructions, resolutions, decrees or sentences
issued against Multipack. No senior executive officer or present or former
director of Multipack, has or shall have any claim seeking and indemnification
instituted against CMF related to an act or omission prior to the date hereof
on the part of said executive officer or director.
4.8 Benefits Programs
(a) With regard to the workers, employees and executive officers
(including the managers) of Multipack, hereinafter the "Employees of
Multipack", ANDINA and Multipack shall legally terminate the labor contracts
of those Employees of Multipack who resolve not to continue rendering services
to CMF, irrespective of the motive.
(b) With the exception of what is set forth in Annex 4.8, subsequent to
the termination of the labor contract, or after employees have been hired by
CMF acknowledging their years of service and their labor rights accrued during
the period served at Multipack, except for any vacation leaves they may have
pending:
(d) with respect to the Employees of Multipack there shall not be any
obligation on CMF's part to those workers and employees, which accrued prior
to the Date of the Closing, other than those labor rights expressly
acknowledged, whenever applicable;
(ii) except as set forth in Annex 4.8, there is, with respect to the
Employees of Multipack no Benefit Programs or indemnity agreements
over and above the legal limits. The parties agree that the
indemnification for years served of the Employees of Multipack and
the indemnification for unused vacation time of those Employees of
Multipack who shall continue rendering services to CMF, shall be
assumed by CMF;
(iii) If there had been or have been any Benefit Programs, with he
exception of what is set forth in Annex 4.8, (a) Multipack (and its
shareholders), has complied with all its obligations related to all
the Benefit Programs, including the payment of all the contributions
owed, and (b) said Benefit Programs of the Employees of Multipack
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have been executed and maintained in accordance with all applicable
statutes and regulations.
(iv) Except as described in Annex 4.8, Multipack does not have any
agreement, contract, commitment or understanding, whether legally
binding or not, (1) to create an additional Benefit Program for the
Employees of Multipack; (2) to increase the benefits or its
contribution requirements for any of the Benefit Programs (should
there be any); (3) to amend, change or terminate, in any material
respect, any existing Benefit Program; and (iv) to have a retirement
plan in effect.
4.9 Labor Contracts
With respect to the Employees of Multipack and with the exception of what
is indicated in Annex 4.9, all its labor contracts have been or shall be
legally terminated. In addition, Multipack has fully complied with its tax,
labor and retirement plan contribution obligations with respect to each one of
the Employees of Multipack.
4.10 Suppliers and Main Clients
Except as set forth in Annex 4.10, Multipack is not a party to any
dispute with any of its suppliers or main clients. ANDINA and Multipack are
not aware of the fact that, as the date hereof, the materialization of the
transactions and acts contemplated in this Agreement, have or shall have an
adverse effect in the commercial relationship of CMF with any of such
suppliers or clients.
4.11 Absence of Certain Changes and Events
Except as set forth in Annex 4.11 or the stipulations in this Agreement,
since January 1, 2001 Multipack has conducted its business only in the
ordinary and normal course, and it has not:
(a) sustained any damage or destruction affecting in an adverse manner
the Assets of Multipack;
(b) experienced any material adverse change in its working capital,
assets, liabilities, financial condition, commercial projections or
relationship with any supplier or client (except as set forth in Annex 4.11),
that adversely affects the Assets of Multipack;
(c) incurred any responsibility or obligation (whether absolute,
accumulated, contingent or otherwise) other than in the ordinary and normal
course of its business and which adversely affects the Assets of Multipack;
(d) paid, complied with or satisfied any claim, responsibility or
obligation other than in the ordinary and normal course of its business and
which adversely affects the Assets of Multipack;
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(e) waived any claim or material right which adversely affects the Assets
of Multipack;
(f) sold, transferred or disposed of any of the Assets of Multipack,
except as set forth in Annex 4.11 or in the ordinary and normal course of its
business;
(g) paid, loaned or advanced any assets, or sold, transferred or leased
any asset to any Employee of Multipack, except for the normal compensation
represented by salaries and benefits and the advances granted in the ordinary
course of business; or
(h) entered into any contract or executed any material transaction
adversely affecting the Assets of Multipack, other than in the ordinary course
of its business.
4.12 Financial Statements
(a) Annex 4.12 contains the balance sheet and the complete audited
financial statements of Multipack as of December 31, 2000, with related notes
(hereinafter, the "Financial Statements of Multipack").
(b) The Financial Statements of Multipack are, with respect to the Assets
of Multipack, accurate, correct and complete, and correctly present the
financial condition for the year or period ended December 31, 2000. With
respect to the Assets of Multipack and the outstanding agreements of Multipack
that CMF shall assume in accordance with the provisions in Section 2.5 (e) of
this Agreement, there do not exist current liabilities as of the Date of the
Closing other than those incurred in the ordinary and normal course of the
business of Multipack. Should those liabilities exist, ANDINA shall assume its
payment only up to the Date of the Closing of the Business. After the Date of
the Closing, any liability that is generated from said date shall be assumed
by CMF, unless the cause of said liability arises out of an activity prior to
the Date of the Closing, in which case its payment shall also be for the
account of ANDINA. For these purposes, the Financial Statements of Multipack
are based on the books and records that have been maintained by Multipack and
same have been prepared in accordance with Chilean GAAP.
(c) Multipack has not made any change in the method of accounting, or in
any material practice or principle of Chilean GAAP.
4.13 Insurance Policies
Annex 4.13 sets forth a complete and accurate list and description of all
the insurance policies currently in effect for Multipack with respect to the
Assets of Multipack that shall transfer to CMF, or for which Multipack has
paid or is obligated to pay all or part of their premiums. With the exception
of what is stipulated in Annex 4.13, Multipack hereby represents and warrants
with respect to these insurance policies that cover the Assets of Multipack
that: (i) they are currently in force and that the relevant payments of
premiums are up to date; (ii) that there has been no act or omission
whatsoever on the part of any person who is an employee of Multipack by virtue
of which any of those policies
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could be terminated or be rescindable in whole or in part; (iii) that there
exist no pending claim whatsoever and there has occurred no fact whatsoever
that has resulted or may result in a claim under any of those policies; and
(iv) that in its opinion, the policies are adequate to provide coverage for
the risks reasonably foreseen in connection with the business and the Assets
of Multipack that are transferred to Crowpla. It is hereby expressly
acknowledged that the representation contained in (iv) above shall cease to be
in effect when the management of CMF shall have submitted to the Board of
Directors, designated in accordance with the provisions in Section 2.6 (iv),
its evaluation of the policies of insurance included in the Business, within
10 business days after the Date of the Closing.
4.14 Sufficiency of the Information
Each and every statement, warranty, promise or representation on the part
of ANDINA and Multipack under this Agreement and every statement contained in
any document (including the Financial Statements and the Annexes),
certificate, document and other writ delivered or to be delivered by ANDINA to
CRISTALERIAS (or any of its representatives), in accordance with the
provisions in this Agreement, are complete, accurate and truthful, and they do
not contain or shall not contain an erroneous or false statement with respect
to any material fact, nor do they fail to disclose or shall fail to disclose a
material fact, or fail to disclose or shall fail to disclose any fact
necessary to be stated in light of the circumstances under which they were
made, making the statement contained herein or therein materially misleading
(i.e. statements that adversely affect the Assets of Crowpla or the
achievement of the Business subject matter of this Agreement).
ARTICLE V
CLOSING FINANCIAL STATEMENTS
CRISTALERIAS, ANDINA and Crowpla, respectively, hereby pact and mutually
agree as follows:
5.1 Closing Financial Statement
(a) That, as soon as practicable, and no later than July 16, 2001,
CRISTALERIAS and Crowpla shall deliver to the audit firm
PricewaterhouseCoopers (the "Auditors") the balance sheet and the financial
statements of Crowpla as of the closing of business on June 30, 2001
(hereinafter the "Ad Interim Financial Statements"), to have them submitted to
a complete audit.
(b) Said review and audit shall be conducted in accordance with Chilean
GAAP in order for said Auditors to deliver their opinion as to whether the Ad
Interim Financial Statements of Crowpla clearly present the financial position
of Crowpla as of the indicated date, in accordance with Chilean GAAP and,
particularly, with respect to: (i) the excess of Net Working Capital or VECT
(PW); (ii) the debt subject to interest irrespective of its origin or
denomination or DF (PW); (iii) the determination of DIF (C); and (iv) that
there is no shortage of fixed assets, all that in accordance with the
accounting registries of Crowpla as of the Date of the Closing, and without
taking into consideration the impact that the transactions carried out in
accordance with this Agreement may have on such
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accounting registries. Said audited balance sheet and financial statement,
accompanied by the Report of the Auditors referred to in letter (d) below,
shall be referred to as the "Financial Statements of the Closing".
(c) "Net Working Capital" shall refer to the value of all those
operational assets - other than investment in affiliates, equity, goodwill,
intangibles and fixed assets - which are directly and clearly necessary for
the business, less the financing (liabilities) of said assets obtained in the
ordinary and normal course, from third parties and without a financial cost
(suppliers). Liabilities include allowances for expenses and income taxes.
(d) The Financial Statements of the Closing shall be delivered by the
Auditors to ANDINA and CRISTALERIAS as soon as possible after the date hereof
(the parties shall use their best efforts to make that happen prior to
July 31, 2001). The Financial Statements of the Closing shall be accompanied
with a report which contains a signed statement of the Auditors (the
"Report"), containing, if applicable, an adjustment to the Ad Interim
Financial Statements, especially, (i) the variation in Net Working Capital;
(ii) the variation in the debt subject to interests irrespective of its origin
or denomination or DF (PW); (iii) the determination of the DIF (C); and (iv)
that there exist no shortages of fixed assets, all that in accordance with the
accounting registries of Crowpla as of the Date of the Closing.
(e) CRISTALERIAS may deliver to ANDINA a written notice of its
objection(s) to the adjustments to the Ad Interim Financial Statements by the
Financial Statements of the Closing or to the contents of the Report (the
"Objection Notice"), within five business days from the delivery to
CRISTALERIAS of the Financial Statements of the Closing.
(f) Should there be no Objection Notice within the period indicated
above, the Financial Statements of the Closing shall be official CMF financial
statements as of that date and, therefore, binding upon CMF. Should there
exist objections, the Objection Notice shall specifically indicate the items
and calculations relating to the objections. CRISTALERIAS and ANDINA shall
attempt in good faith, for a period of five (5) business days after the
delivery of the Objection Notice (or within the period that the Parties may
agree to in writing), solve the matters set forth therein. In the event that
the Parties are unable to solve said differences during the above-indicated
five-day period (or in the period that the Parties may agree upon) the Parties
shall submit the matter in controversy to the review of the auditing firm KPMG
Peat Marwick (Santiago, Chile), hereinafter the "Conciliator". The review on
the part of the Conciliator shall be limited exclusively to the items and
calculations objected to in the Objection Notice which have not been resolved
by the Parties. The Parties shall cause the Conciliator to review as soon as
possible (limited to the items and calculations in controversy) the Financial
Statements of the Closing and issue its opinion with respect to the
adjustments being contested. The Conciliator shall be entitled (subject to the
limitations indicated above) to effect the corrections it may consider
appropriate and compatible with the terms of this Agreement. The Conciliator
shall issue a written report of its review, setting forth, with reasonable
detail, the adjustments to the Financial Statements of the Closing. Except
that the Parties agree otherwise, the adjustments to the Financial Statements
of the Closing by the Conciliator shall be final and binding upon CMF, and
give origin to the definitive values of VECT (PW) and DF (PW).
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5.2 Set Off, Expenses and Payment of Differences
(a) In accordance with the provisions in Article II of this Agreement,
once DF (PW) and VECT (PW) have been determined, it shall be necessary to
determine DIF (C). The Board of Directors of CMF shall determine the
definitive price per share and, as a result, the value of the Capital Increase
of CRISTALERIAS as per the provisions in Section 2.3 (b) (i). CRISTALERIAS
shall be obligated to complete DIF (C), or DIF (C) shall be refunded to it, as
the case may be, within five days from the date on which said determination is
made, all of which shall be evidenced in the share subscription agreement of
said Capital Increase of CRISTALERIAS executed on the date hereof
(b) Without prejudice to the provisions in Section 5.1 (d), in the event
that the audit of PricewaterhouseCoopers (or the Conciliator) to the Ad
Interim Financial Statements shall determine the non-existence of a fixed
asset, CRISTALERIAS shall restore to CMF the missing fixed asset or, in its
absence, an equivalent asset or its value.
The lack of a determination of an adjustment on the Auditor's or the
Conciliator's part, as the case may be, shall not limit the right of ANDINA
under Section 5.2 and Article VI of this Agreement. As a result, if at any
time subsequent to the Closing, it is determined that on the Date of the
Closing: (i) a liability or a contingency is incorrectly reflected or not
reflected at all, and/or (ii) a fixed asset is absent, CRISTALERIAS shall
compensate ANDINA and/or the Company committing itself to the payment of the
relevant amount, irrespective of the amount, as indicated below: (i) provided
the contingency wrongly reflected or not reflected at all had not been
considered in the calculation of the working capital of Crowpla, once said
contingency becomes enforceable; and (b) restoration to CMF the missing fixed
asset, or alternatively, an equivalent asset or its value.
(c) The fees and expenses of the Auditors and those of the Conciliator
(should there have been differences) shall be paid and shared evenly by
CRISTALERIAS and ANDINA.
5.3 Conciliation with respect to Raw Materials
CRISTALERIAS and ANDINA agree that in the event that, subsequent to the
Date of the Closing, any of the Parties has a problem with respect to the
quality, condition or utilization of any raw material or inventories
contributed by any of the Parties to the Business, the matter shall be
submitted (should the disagreement continue), to a mandatory conciliation by
the General Manager of TCCC in Chile. The conciliator shall issue a
pronouncement in accordance with the quality rules of TCCC and/or at his
(her) discretion. The determination of the General Manager of TCCC in Chile
shall be binding upon the Parties. Only in the event that TCCC is unable or
unwilling to resolve the matter, will any one of the Parties be entitled to
resort to the Arbitrator-Mediator mechanism described in accordance with the
provisions in Section 7.10 of this Agreement.
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5.4 Conciliation with respect to Machinery
CRISTALERIAS and ANDINA agree that, in the event that, subsequent to the
Date of the Closing, any of the Parties complains with respect to the quality,
condition or utilization of the machinery contributed by any of the Parties to
the Business, the matter shall be submitted (should the disagreement
continue), to a mandatory conciliation by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Hoyuelos. The
conciliator shall issue a pronouncement in accordance with technical criteria
and/or at his discretion. The determination of the Conciliator shall be
binding upon the Parties. Only in the event that the Conciliator is unable or
unwilling to resolve the matter, shall any one of the Parties be entitled to
resort to the Arbitrator-Mediator mechanism described in accordance with the
provisions in Section 7.10 of this Agreement.
ARTICLE VI
INDEMNIFICATION AND TERMS
6.1 Protected Parties
The Parties hereto agree that if, in accordance with this Article VI, any
of the Parties, or CMF (hereinafter the "Protected Parties") sustains any
damage or loss, it shall have the right to demand from the other Party (the
"Indemnifying Party") the relevant indemnification pursuant to the provisions
set forth below.
6.2 Indemnification by CRISTALERIAS
Even in the event that there has not been un adjustment in the Financial
Statements of the Closing and unless it is otherwise expressly limited by this
Article VI, CRISTALERIAS shall indemnify and reimburse ANDINA or CMF, as
Protected Parties under this Section 6.2, for every and each Loss; (i.e. every
actual loss, responsibility or damage (including the fines, penalties,
sentences and conciliation both civil and criminal), costs and expenses
(including the court costs, reasonable fees of accountants and counsel) and
any payment that CMF or ANDINA may be obligated to make to officers,
directors, employees, agents or third parties pursuant to any agreement or
obligation, debt, commitment or other agreements or conventions (together with
the interests and fines with respect thereto) which arise out of a condition
that exists prior to the Date of the Closing, without limitation as to their
amount and provided they have not been duly provided for in the Financial
Statements of the Closing (hereinafter, a "Claim"); including in them, without
limiting, those derived therefrom:
(i) any breach, omission or inaccuracy of any of the representations or
warranty of CRISTALERIAS set forth in Article III of this Agreement,
whether said breach, omission or inaccuracy exists as of the date
hereof and continues after the Date of the Closing;
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(ii) any breach or non-compliance on the part of CRISTALERIAS and Crowpla
with regard to any obligation or agreement of CRISTALERIAS and
Crowpla contained in this Agreement; and
(iii) any fact, circumstance, event or compliance of a condition or term
of a date prior to the Date of the Closing, which results in a Loss
(as defined above), sustained or incurred by any of the Protected
Parties when enforcing their indemnification rights set forth in
accordance with this Section 6.2.
6.3 Indemnification by ANDINA
ANDINA agrees to indemnify and reimburse CRISTALERIAS or CMF, as
Protected Parties under this Section 6.3, for every and each Loss (i.e. each
and every actual loss, responsibility or damage (including the fines,
penalties, sentences and conciliation both civil and criminal), costs and
expenses (including the court costs, reasonable fees of accountants and
counsel) and any payment that CMF or CRISTALERIAS may be obligated to make to
officers, directors, employees, agents or third parties pursuant to any
agreement or obligation, debt, commitment or other agreements or conventions
(together with the interests and fines therefrom) which originate from: (a)
any of the Assets of Multipack, the Employees of Multipack, the contracts of
Multipack assumed by CMF in accordance with the provisions in Section 2.5 (e),
or any matter that could affect CMF as successor in the businesses of
Multipack; and (b) a date prior to the Date of the Closing, without limitation
as to their amount (hereinafter, a "Claim"); including in them, without
limiting, those derived from:
(i) any breach, omission or inaccuracy of any of the representations or
warranty of ANDINA set forth in Article IV of this Agreement,
whether said breach, omission or inaccuracy exists as of the date
hereof and is continues after the Date of the Closing;
(ii) any breach or non-compliance on the part of ANDINA and Multipack
with regard to any obligation or agreement of ANDINA and Multipack
contained in this Agreement; and
(iii) any fact, circumstance, event or compliance of a condition or term
of a date prior to the Date of the Closing, which adversely affects
the properties and assets to be contributed or sold to the Business
by ANDINA or Multipack results in a Loss (as defined above),
sustained or incurred by any of the Protected Parties when enforcing
their indemnification rights set forth in accordance with this
Section 6.3.
6.4 Survival
(a) All the statements, warranties and representations contained in this
Agreement (particularly those of Articles III and IV of this Agreement) or in
any certificate or other document delivered pursuant to this Agreement, or
related to this Agreement, shall be extinguished in accordance with the legal
terms set by the relevant statute of limitations
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once the extinction has been declared by a court ruling. The agreements herein
shall survive without exception, until that time unless otherwise expressly
stated in this Agreement.
(b) Notwithstanding anything to the contrary, the statements, warranties
and representations contained in Articles III, Sections 3.1, 3.2, 3.4 and 3.5
and in Section 4.1 of Article IV, shall survive the Date of the Closing
without limitation (and which shall hereinafter be collectively referred to as
the "Survival Statements").
(c) It is hereby expressly acknowledged that no investigation in Crowpla
or CMF, or other review on the part of the Auditors (and/or the Conciliator,
as the case may be), or on the part of ANDINA (or its representatives) shall
affect the terms of the statements, warranties and representations indicated
above.
6.5 Notice of Claim
(a) Any of the Protected Parties shall timely notify the Indemnifying
Party, in writing, with respect to any recovery Claim, specifying the nature
thereof and, if known, the amount (or an estimate of the amount of the
responsibility arising therefrom) and its costs. In this case, CMF or the
Indemnifying Party shall provide the relevant Protected Party, as soon as
practicable, with the information and documentation reasonably required by the
latter to support and prove the Claim filed.
(b) The indemnification provided for in Sections 6.2 and 6.3 shall be
limited to Claims filed within a period of five years from the Date of the
Closing, except with respect to the Survival Statements, where the term shall
be that which is stipulated in Section 6.4. It shall be understood that there
implicitly exists a Notice of Claim under this Section 6.5 as soon as there
exists a notice to the shareholders of CMF, through the Board of Directors or
otherwise, of a Claim filed against CMF (at any time subsequent to the Date of
the Closing) by a person who demands indemnification or a payment on a date
prior to the Date of the Closing.
6.6 Defense
(a) If the facts presumably constitute a Claim under this Agreement, the
Indemnifying Party shall be entitled to assume the defense or the legal
proceeding thereof, by means of a written notice addressed to the Protected
Parties, including the hiring of counsel or accountants, at its own cost and
expense. Each one of the Protected Parties shall have the right to use counsel
independently from counsel retained by the Indemnifying Party, in any legal
action and to participate in it. The fees and expenses of counsel retained by
the Protected Parties shall be at all times for its exclusive account.
(b) If the Indemnifying Party does not assume the defense or legal
proceeding of a Claim within (i) fifteen (15) days from the notice thereof
(either provided by ANDINA or by CMF) or (ii) within the period in which it is
necessary to make a defense in a legal proceeding, whichever is the lesser,
the Protected Parties, as the case may be, shall be
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entitled to settle, compromise or agree upon a conciliation with respect to
that claim, without the consent of the Indemnifying Party.
(c) CMF or the Indemnifying Party shall not agree upon the settlement of
any claim which determines: (i) an indemnification that does not consist of
the payment of monetary damages, or (ii) that could produce an adverse impact
or effect on the Business or on the financial condition of CMF, without the
prior written consent of all the Protected Parties. The Protected Parties
shall not be responsible for any settlement or conciliation of a Claim
asserted by the Indemnifying Party or CMF, without said consent.
(d) Whether the Indemnifying Party elects or not to defend or submit said
Claim in a legal proceeding, CMF and all the parties that execute this
Agreement shall cooperate in the defense or legal process thereof and shall
deliver the registries, information and testimonies that may be necessary and
reasonably requested; and shall attend the meetings, summons, testimonials,
hearings, lawsuits and appeals that may be reasonably requested in connection
therewith. Whenever the law so determines, or by virtue of a written agreement
of the Parties, the Indemnifying Party may subrogate all its rights of CMF or
the Protected Parties, as the case may be.
ARTICLE VII
MISCELLANEOUS
7.1 Complete Agreement
The provisions in this Agreement, its Annexes, the Shareholders Pact and
the other documents mentioned herein or in the Letter of Intent, constitute
the complete understanding of the Parties with respect to the Business. No
amendment, modification or alteration of the terms or provisions in this
Agreement shall be binding unless in writing and duly signed by the Parties
hereto.
7.2 Parties to the Agreement, Successors and Assigns
The terms, conditions and obligations set forth in this Agreement have
been established in favor of and shall be binding upon the Parties hereto and
their respective permitted successors and assigns. Without prior and mutual
written consent, of both CRISTALERIAS and ANDINA, neither Party shall assign
its rights, duties and obligations arising herefrom, or any part thereof, to
any other person or entity.
7.3 Counterparts
This Agreement may be executed in one or more counterparts, each one of
which shall be deemed an original for all purposes and all of which shall
constitute the same Agreement.
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7.4 Headings
The heading of the Articles, Sections and paragraphs of this Agreement
have been inserted for convenience or reference purposes only and, as a
result, they shall not be considered to be part of the Agreement or affect in
any manner its interpretation.
7.5 Amendments and Waivers
Only written consent by a party benefiting from a designated provision
shall be valid to waive any of the terms or conditions contained in this
Agreement. The waiver of any of the provisions in this Agreement shall not be
considered a waiver of any other provision in the Agreement (whether similar
or not). Any failure or delay in the exercise of a right shall not constitute
a waiver of such right.
7.6 Expenses
Unless expressly stated otherwise in this Agreement, ANDINA and Multipack
(as a single party) and CRISTALERIAS and Crowpla (as a single other party),
shall pay their own costs and expenses (either incurred by them or on their
behalf) in connection with this Agreement and the transactions contemplated in
it (including the reasonable fees and expenses of their financial, accounting
and legal advisors).
7.7 Notices
Any notice, application, instruction or other document to be delivered
between the Parties to this Agreement, shall be in writing and: (i) delivered
in person, (ii) transmitted by facsimile, or (iii) sent by certified mail or
any other overnight courier with proof of receipt requested, to the addresses
indicated below:
If to Embotelladora Andina S.A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: General Manager
Fax No.: ▇▇▇ ▇▇▇▇
If to Cristalerias de Chile ▇.▇.
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: General Manager
Fax No.: ▇▇▇ ▇▇▇▇
or to such other address or fax number of the Parties that may have been
specified by means of similar notice. Any notice delivered in person or by
facsimile transmission in the manner indicated in this Agreement shall be
considered to be duly made to the party to whom it is addressed at the time of
receipt by said party or its representative. It shall be conclusively assumed
that any notice that is sent by mail in the manner provided for in this
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Agreement has been duly received by the party to whom same is addressed at
noon (local time of the recipient) on the tenth day after the date on which it
was mailed.
7.8 Applicable Law; Interpretation and Solution of Controversies
This Agreement is entered into and shall be construed in accordance with
the laws of the Republic of Chile. No provision in this Agreement, or any
related document, shall be interpreted against any of the Parties by a court
or other judicial authority on the grounds that it has been considered or it
is being considered that said Party wrote or prepared the relevant provision.
7.9 Public Announcements
No public announcement shall be made with respect to the transactions or
acts contemplated in this Agreement without the prior consent of CRISTALERIAS
and ANDINA, provided that any of the Parties may make such announcement if its
legal advisors communicate to it in writing that it is legally required to
effect said announcement. CRISTALERIAS and ANDINA shall together analyze any
public announcement or disclosure with respect to the transactions or acts
contemplated in this Agreement, prior to the issuance or making of such
notices or announcements.
7.10 Arbitration
Every and any controversy, difficulty or difference arising among the
Parties and which has its origin in the interpretation, applicability,
compliance, non-compliance, validity, performance, nullity, effects or force
of this Pact, any of its clauses or effects, being the foregoing enumeration
by way of example only, shall be submitted to the knowledge and decision of an
arbitrator mediator or amicable referee. The Parties hereto hereby designate
as arbitrator ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and in his absence, ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇. The award pronounced by the arbitrator shall not be overturned
in any manner whatsoever. If any of the persons designated is unable or
unwilling to perform these duties, the parties, by common agreement, shall
designate an alternate. If the parties fail to reach said agreement, the
ordinary courts of law shall designate an alternate, but in such an event, the
arbitrator shall only be a mediator and only in accordance with the procedure,
being obligated to resolve in once single instance according to the laws, and
having the appointment necessarily to fall on a lawyer who has performed at
least three consecutive years the duties of tenure Civil or Commercial Law
professor at the University of Chile Law School in Santiago or the Pontifical
Catholic University of Chile. The mere fact that any of the parties resort to
the ordinary courts of law for the appointment of the arbitrator shall imply
the non-existence of an agreement between them in order to effect the
designation.
7.11 No Third Party Beneficiaries
Except for the Parties to this Agreement, there are no other persons who
may claim any rights on from his Agreement or any other rights which are
granted by virtue hereof.
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7.12 Knowledge of the Parties or the Company
As used in this document, the terms "in the knowledge of", "as far as ...
understands", "in the understanding of", referred to either of the Parties,
shall mean the knowledge of a director, executive officer, worker or advisor
of said Party or the Company (as applicable). The knowledge shall include the
actual knowledge, as well as the knowledge that a reasonable business person
should have had, after review and the exercise of reasonable due diligence
with respect to it.
7.13 "Inclusion"
In this document the words of inclusion and the word "and" shall not be
interpreted as terms of limitation. The reference to matters "included" shall
be considered as illustrations and not of exclusion.
7.14 References
Each time that in this Agreement a reference is made to an Article,
Section, Annex or Appendix, said reference shall be considered in the same
manner as it is applied in the specified Article or Section (or to the
specified Annex or Appendix thereto).
7.15 Effectiveness
Each time a reference is made in this Agreement to the "date of
effectiveness" of same, or "the date hereof", said date shall be the Date of
the Closing, on which this Agreement has been entered into by each one of the
parties hereto.
FOOTNOTES:
(1) The Land is the real property owned by CRISTALERIAS, adjacent to the
present plant of Crowpla, located at La ▇▇▇▇▇▇▇ 0390, ▇▇▇ ▇ - ▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with an approximate surface of
30,000 square meters.
(2) This amount has been calculated without considering the granting of
the financing referred to in Section 2.4 (d) of this Agreement.
(3) This amount has been calculated without considering the granting of
the financing referred to in Section 2.4 (d) of this Agreement.
(4) It refers to the real property owned by ANDINA, located at ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ 362, San ▇▇▇▇▇▇▇ County.
(5) Financing whose amount shall not exceed the one resulting from the
lesser between these two figures: (a) 40 % of its net worth, or (b) an
amount equivalent to
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one time the projected operational profit of CMF for the year 2001 plus
the projected depreciation of CMF for the year 2001 in accordance with
the Business Plan that is enclosed as Annex 2.4 hereto.
IN WITNESS WHEREOF, each one of the Parties has caused this Agreement to
be executed on its behalf on the date first written.
(Two illegible signatures)
CRISTALERIAS DE CHILE S.A.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(Two illegible signatures)
CROWPLA REICOLITE S.A.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Costabal - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
(Two illegible signatures)
EMBOTELLADORA ANDINA S.A.
▇▇▇▇▇ ▇▇▇▇▇▇ Rioseco - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Doxrud
(Two illegible signatures)
ANDINA INVERSIONES SOCIATARIAS S.A.
▇▇▇▇▇ ▇▇▇▇▇▇ Rioseco - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Doxrud
(Two illegible signatures)
ENVASES MULTIPACK S.A.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ R. - ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
