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PLAN OF THE MERGER OF POLPACK ZEUS SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ AND ZEUS PACKAGING (POLAND) SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ

PLAN OF THE MERGER OF POLPACK ZEUS SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ with its registered office in Warsaw

AND

ZEUS PACKAGING (POLAND) SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ with its registered office in Złotniki

I. INTRODUCTION

This merger plan (the „Merger Plan”) has been prepared and agreed on 25 July 2023, pursuant to article 498 and 499 of the Commercial Companies Code (the “CCC”) in relation to the merger between the company:

1) Polpack Zeus spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw (03-191), ul. Płochocińska 19, Warsaw, entered in the register of entrepreneurs of the National Court Register kept by the District Court for the Capital City of Warsaw in Warsaw, 12th Business Division of the National Court Register, under No. 0001014157, NIP: 5252939854, REGON: 524227175 (the “Acquiring Company”);

2) Zeus Packaging (Poland) spółka z ograniczoną odpowiedzialnością with its registered office in Złotniki, ul. Czołgowa 4, 62-002 Suchy Las, entered in the register of entrepreneurs of the National Court Register kept by the District Court for Poznań – Nowe Miasto and Wilda in Poznań, 8th Business Division of the National Court Register, under No. 0000357803, NIP: 5272628809, REGON: 142435038 (the “Target Company”) - hereinafeter jointly referred to as the “Merging Companies”, effected pursuant to article 492 § 1 pkt 1) of CCC, i.e. by transfer of all assets and liabilities of the Target Company to the Acquiring Company (the “Merger”), in exchange for the newly-created shares which the Acquiring Company will issue to the sole shareholder of the Target Company, being at the same time the sole shareholder of the Acquiring Company, i.e. Zeus Packaging Group Limited with its registered office in Dublin, at Unit 500 Grants Row, Greenogue Business Park, Rathcoole, Co. Dublin, Ireland (the „Shareholder”)

II. GOALS OF THE MERGER

The purpose of the Merger is centralize of the management boards of the Merging Companies without the necessity to transfer separately a particular element of the assets and liabilities to the Acquiring Company. The Merger shall have the positive effect on the financial situation the Merging Companies, shall increase the effectiveness of the management and shall reduce the operational costs of the business activity.
The Polpack Zeus sp. z o.o. with its registered office in Warsaw is the Acquiring Company because the core business to be continued is concentrated in the Acquiring Company, as a result of the acquisition of an organised part of the business from the third party. In view of the above the business of the Acquiring Company correspond to the core business of the Zeus group’s.

III. COMPANIES PARTICIPATING IN THE MERGER

The following companies participate in the Merger

1) the Acquiring Company

Polpack Zeus spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw, ul. Płochocińska 19, 03- 191 Warsaw, entered in the register of entrepreneurs of the National Court Register kept by the District Court for the Capital City of Warsaw in Warsaw, 12th Business Division of the National Court Register, under No. 0001014157, NIP:52522939854, REGON: 524227175

2) the Target Company

Zeus Packaging (Poland) spółka z ograniczoną odpowiedzialnością with its registered office in Złotniki, ul. Czołgowa 4, 62-002 Suchy Las, entered in the register of entrepreneurs of the National Court Register kept by the District Court for Poznań – Nowe Miasto and Wilda in Poznań, 8th Business Division of the National Court Register, under No. 0000357803, NIP: 5272628809, REGON: 142435038

IV. MERGER METHOD AND ITS LEGAL BASIS

The Merger will be effected pursuant to the article 492 § 1 point 1 of the CCC by transferring all of the assets and liabilities held by the Target Company to the Acquiring Company.

Pursuant to the article 506 § 1 and § 4 of the CCC, the Merger will be effected on the basis of a resolution of the Shareholders’ Meeting of the Acquiring Company and on the basis of a resolution of the Shareholders’ Meeting of the Target Company, stating approval of the Merger Plan and proposed changes to the Articles of Association of the Acquiring Company.

The draft resolutions of the Shareholders’ Meeting of the Acquiring Company, the Shareholders’ Meeting of the Target Company and proposed amendments to the Articles of Association of the Acquiring Company are attached as Attachment No. 1, Attachment No. 2 and Attachment No. 3 thereto.

The Merger will be effected on the day of its entering into registry by the registry court having the jurisdiction over the Acquiring Company’s registered office, pursuant to the article 493 § 2 of the CCC (the “Merger Day”).

As at the date of signing of the Merger Plan, the share capital of the Acquiring Company amounts to PLN 5,000.00 (five thousand zlotys).

The Merger will be concluded with the concurrent increase of the share capital from the amount of PLN 5,000.00 (five thousand zlotys) to the amount of PLN 100,000.00 (one hundred thousand) by issuing 1,900 (one thousand nine hundred) new shares of the nominal value of PLN 50.00 (fifty zlotys) each and the total nominal value of PLN 95,000.00 (ninety five thousand zlotys), which will be taken up by the sole shareholder of the Target Company, being at the same time the sole shareholder of the Acquiring Company, i.e. the Shareholder.

In connection with the increase of the share capital of the Acquiring Company, the Merger will require amendment of the Articles of Association of the Acquiring Company. The planned amendments to the Articles of Association of the Acquiring Company are described in detail in Attachment No. 3 thereto.

Taking into consideration content of the statements granted by the Shareholder of the Acquiring Company and the Target Company under article 5031 § 1 of the CCC, the following actions will not be required in connection with the Merger:

  • preparation of a written reports of the Merging Companies’ Management Boards, as referred to in article 501 of the CCC, justifying the Merger, its legal basis and economic justification
  • informing each other by the Management Board of the Merging Companies as referred to in article 501 § 2 of the CCC, of any material changes in assets and liabilities that occurred between the date of the Merger Plan and the date of the adoption of the resolution of the Merger;
  • the examination of the Merger Plan by the auditor referred to in article 502 § 1 and 2 of the CCC, and preparation of an opinion thereon by the auditor.
As a result of the Merger:
  1. the Acquiring Company shall assume all of rights and obligations of the Target Company;
  2. the Target Company shall be dissolved without liquidation being conducted, and all its rights and obligations shall be acquired by the Acquiring Company under universal succession title;
  3. on the Merger Date, the Acquiring Company shall receive the decisions, permits, concessions and allowances granted to the Target Company unless the act or decision on granting the permit, concession or allowance stipulates otherwise.
V. THE SHARES EXCHANGE RATIO

In exchange of the transfer of the Target Company’s assets to the Acquiring Company, the Acquiring Company will issue the newly issued shares of the Acquiring Company to the shareholder of the Target Company, being at the same time the shareholder of the Acquiring Company, i.e. the Shareholder.

Due to the negative equity od the Acquiring Company, difficulties have emerged in establishing the exchange ratio based on the valuation of the book values of both the Acquiring Company and the Target Company.

As a result, the determination of the number and value of the shares allocated to the Shareholder was made in relation to the share capital value of the Merging Companies

Furthermore, given that the Shareholder maintains complete control overt both the Acquiring Company and the Target Company, with 100% ownership of the shares in the Merging Companies, the exchange ratio has been established contractually.

The legislation does not mandate that the share exchange ratio must be based on mathematical valuation methods. As a result, it is allowable to establish the exchange ratio contractually. The legal doctrine support this view, especially in cases where one of the merging companies has a negative balance sheet value.

The aforementioned position is exemplarily supported by dr M. Rodzynkiewicz in the Commnetary on 503 of the CCC (M. Rodzynkiewicz, Commercial Companies Code. Commentary, 2018, 7th edition) that:

“(…) one can not a priori reject the admissibility of determining this ratio in a purely ‘contractual’ manner, i.e. reflecting the actual will of the participants in the merger, even it the exchange ratio determined in this manner is not based on any known valuation method.”.

Consequently, it was assumed that in exchange for the shares in the Target Company, the Shareholder would received shares in the Acquiring Company, i.e. 1,900 (one thousand nine hundred) shares with a nominal value of PLN 50.00 (fifty zlotys) each.

Considering the abovementioned circumstances and the Shareholder holds 100% of the shares in the Merging Companies, the share exchange ratio was established by comparing the nominal value of the shares of the Merging Companies. At the same time, there is no possibility of the Shareholder being disadvantaged as a shareholder of the Target Company, as both before and after the Merger the Shareholder will remain the sole shareholder of the Acquiring Company.

Accordingly, the share exchange ratio is 1 ; 2.11, i.e. 2.11 shares in the Target Company for each newly created share in the Acquiring Company.

The shares in the increased share capital of the Acquiring Company shall be acquired in such a way that in exchange for 4,000 (four thousand) shares of the Target Company of the nominal value of PLN 50.00 (fifty zlotys) each end the total nominal value of PLN 200,000.00 (two hundred thousand) the Shareholder will receive 1,900 (one thousand nine hundred) new shares of the Acquiring Company of the nominal value of PLN 50.00 (fifty zlotys) each end the total nominal value of PLN 95,000.00 (ninety five thousand zlotys)

In connection with Merger, no additional payment, referred to in article 492 § 2 and § 3 of the CCC, is predicted.

VI. THE DATE AS OF WHICH THE SAHRES GIVE THE RIGHT TO PARTICIPATE IN THE PROFITS

The shares in the Acquiring Company granted to the Shareholder shall authorise to participate in the profits of the Acquiring Company as of the Merger Date.

VII. RIGHTS AND BENEFITS GRANTTED BY THE SURVIVING COMPANY TO THE SHAREHOLDERS OR TO OTHER PERSONS WITH SPECIAL RIGHTS IN THE TARGET COMPANY

In connection with the merger, no special rights are expected to be granted by the Acquiring Company to shareholder and other persons with special right in the Target Company.

VIII. SPECIAL BENEFITS GRANTED TO THE MEMBERS OF THE GOVERNING BODIES OF THE COMPANIES AND TO OTHER PERSONS INVOLVED IN THE MERGE

No special benefits are expected to be granted to the members of the governing bodies of the Companies or to other persons involved in the merger.

IX. THE CONCETRATION

Th Merger is not subject to notification to the President od the Office for Competition and Consumer Protection since the Merging Companies are members of the same capital group in accordance with article 14 item 5 of the Act of 16th February 2017 on Competition and Consumer Protection (Journal of Laws 2007, no 50, item 331 as amended)

X. THE MERGER

The Target Company and the Acquiring Company unanimously agree that pursuant to the applicable law, they will primarily undertake the following actions immediately after this Merger Plan has been approved and executed:

  1. submission of the Merger Plan to the competent registry court;
  2. publication of the Merger Plan on the websites of the Companies;
  3. notification of the Target Company’s and the Acquiring Company’s Shareholder regarding the intended merger, pursuant to the requirements set forth in article 504 § 1 of CCC;
  4. submission of the resolution on the merger of the Companies passed by the Target Company’s Shareholders’ Meeting and the Acquiring Company’s Shareholders’ Meeting to the competent registration court.


XI. OTHER PROVISIONS

Should any provision of the Merger Plan turn out to be invalid or unenforceable, this shall not affect the validity or enforceability of the other provisions of the Merger Plan.

All attachments to the Merger Plan are integral part of the Merger Plan.

This Plan of the Merger has been drawn up in two language versions: Polish and English. In case of any discrepancies between the language versions, the Polish version shall prevail.

XII. ATTACHMENTS TO THE MERGER PLAN
  1. draft resolution of the Target Company on the merger;
  2. draft resolution of the Acquiring Company on the merger;
  3. draft amendments to the articles of association of the Acquiring Company;
  4. a document setting forth the value of the assets and liabilities of the Acquiring Company as of 1 June 2023;
  5. a statement containing information on the Company’s status disclosed in its accounts of the Target Company as of 1 June 2023;
  6. a statement containing information on the Company’s status disclosed in its accounts of the Acquiring Company as of 1 June 2023;
  7. the balance sheet and profit and loss account of the Target Company as at 1 June 2023;
  8. the balance sheet and profit and loss account of the Acquiring Company as at 1 June 2023.
    9. Agreed and signed on 25 July 2023