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- 1 - Exhibit 99 (b)
NON-COMPETITION AGREEMENT
THIS AGREEMENT dated as of October 1, 1999 is among:
XXXXX HOLDINGS LTD., (BCCA incorporation No. 0327852)
of 00000 Xxxxxx Xxxxxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Vendor")
AND
JAN SKOLLSBERG, of 00000 Xxxxxx Xxxxxxxx, Xxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
("Skollsberg")
AND
00000 XXXXX INC., (Yukon incorporation No.19035) of Xxxxx 000,
000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx, X0X 0X0
(the "Purchaser")
AND
XXXXXXX & XXXXXX, INC., an Ohio corporation, of 00 Xxxxxxx
Xxxx, Xxxxxxxxx, Xxxx, 00000
("S&L")
AND
OSCAR SKOLLSBERG'S FOOD TECHNIQUE LIMITED, (Federal
Corporation No. 1241991 and extraprovincially registered in
British Columbia under No. A-0029524 ) of 000 - 00000
Xxxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Company")
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- 2 - Exhibit 99 (b)
WHEREAS, by a share purchase agreement (the "Share Purchase Agreement")
dated October 1, 1999 among the Parties, the Purchaser purchased all of the
issued and outstanding shares in the capital of the Company,
AND WHEREAS it is contemplated by the parties to the Share Purchase
Agreement that the Parties enter into a non-competition agreement,
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which each Party acknowledges, the Parties agree as follows:
PART 1
INTERPRETATION
1.1 DEFINED TERMS. In this Agreement, including the Recitals, the
following terms will have the following meanings:
"BUSINESS" means the business of the Company as presently operated in
respect of beverage-related products and includes, without limiting the
foregoing, the beverage-related business of the Company as it relates
to flavoured syrups, bottle stands, syrup pumps, pour spouts, recipe
books, flavouring syrups, topping syrups, and chocolate syrup;
"CLAIMS" means a "claim" as defined in the Share Purchase Agreement;
"CLOSING DATE" means October 1, 1999;
"GOVERNMENTAL AUTHORITY" means the government of Canada or the United
States, or the government of any province, state, municipality or other
political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions;
"INFORMATION" means all proprietary technology, know-how, trade
secrets, information concerning the ownership and business,
documentation, records, data, customer lists and information, supplier
lists and information, business prospects, materials, samples and
prototypes and like information relevant to or used in connection with
the Business or ownership of the Company, which is not generally known
and available in the public domain, existing as of the Closing Date;
"PARTIES" means the Vendor, Skollsberg, the Purchaser, S&L and the
Company and "PARTY" means any one of them;
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"PERSON" means an individual, a partnership, a corporation, a trust, an
unincorporated organization, a Governmental Authority and the heirs,
executors, administrators or other legal representatives of an
individual;
"RESTRICTED PERIOD" has the meaning set out in Section 2.2; and
"SHARE PURCHASE AGREEMENT" has the meaning set out in the Recitals.
PART 2
RESTRICTIVE COVENANTS
2.1 CONFIDENTIALITY. Skollsberg covenants and agrees with S&L, the
Purchaser and the Company that he will not, directly or indirectly, divulge to
any Person, any Information and any other information or data which is a trade
secret or confidential or proprietary information of the Company or relating to
the customers, processes or products and services of the Business, including
those relating to research, development, manufacturing, purchasing, accounting,
engineering, marketing, merchandising or selling of products and services.
2.2 RESTRICTIVE COVENANT. Skollsberg covenants and agrees with S&L, the
Purchaser and the Company that he will not, for a period of four (4) years after
the Closing Date (the "Restricted Period") and within Canada or the United
States use any Information in a manner competitive with the Business and,
without limiting the foregoing, he will not during the Restricted Period, within
Canada or the United States:
(a) directly or indirectly manufacture, procure, sell, or
distribute, or facilitate in any manner (including the lending
of money or the guaranteeing of any debts or obligations) the
manufacture, procurement, sale, or distribution of any
products or services materially similar to those of the
Business, either individually or in partnership, or jointly or
in conjunction with, any other Person; or
(b) directly or indirectly assist (as a director, shareholder,
partner, employee or in any other capacity) any Person to
manufacture, procure, sell, or distribute any products or
services materially similar to those of the Business; or
(c) have any direct or indirect interest or concern (as a
director, shareholder, partner, employee or in any other
capacity) in or with any Person, if any part of the activities
of that Person consists of the manufacture, procurement, sale,
or distribution of any products or services materially similar
to those of the Business, or the facilitation in any manner of
the sale of any products or services materially similar to
those of the Business.
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2.3 NON-SOLICITATION - BUSINESS. Skollsberg covenants and agrees with
S&L, the Purchaser and the Company that during the Restricted Period he will
not:
(a) directly or indirectly solicit any customer or potential
customer of the Business;
(b) directly or indirectly assist (be it as a director,
shareholder, partner, employee or in any other capacity) any
Person directly or indirectly to solicit any customer or
potential customer of the Business; or
(c) have any direct or indirect interest or concern (be it as a
director, shareholder, partner, employee or in any other
capacity) in or with any Person if any of the activities of
that Person consists of soliciting any customer or potential
customer of the Business;
if that solicitation would be, directly or indirectly, calculated to result in a
sale of any products or services materially similar to those of the Business.
2.4 NON-SOLICITATION - EMPLOYEES. Skollsberg will not during the
Restricted Period, directly or indirectly, induce any individual who, to his
knowledge, is then employed or under contract on a full time or substantially
full time basis by the Company to leave the employ of the Company or terminate
any contractual relationship with the Company, without the prior written consent
of S&L, the Purchaser and the Company.
2.5 ACKNOWLEDGEMENTS. Skollsberg acknowledges that:
(a) without the non-competition, non-solicitation and other
covenants set out in this Part 2, S&L, the Purchaser and the
Company would not have entered into the Share Purchase
Agreement and that those covenants are reasonable in the
circumstances, and are necessary to protect the economic
position of S&L, the Purchaser and the Company in connection
with the transactions under the Share Purchase Agreement and
that all defences to the strict enforcement of this Part 2 are
waived by Skollsberg;
(b) the breach by Skollsberg of any of the terms of this Part 2
would cause serious and irreparable harm to S&L, the Purchaser
and the Company, or any of them, which could not adequately be
compensated for in damages, and in the event of a breach of
any of the terms of this Part 2, Skollsberg consents to an
injunction being issued against him, restraining him from any
further breach of any if the terms of this Part 2, but the
provisions of this Section 2.5(b) will not be considered to be
in derogation of any other remedy which any of S&L, the
Purchaser or the Company may have in the event of any breach
of any of the terms of this Part 2; and
(c) Skollsberg has reviewed the provisions of this Part 2 and has
turned his mind to the reasonableness of the scope of this
Part 2 including geographical scope, time period,
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and nature of business restricted, and he has received the
advice of legal counsel who has explained the implications of
this Part 2, and that he understands the implications of this
Part 2, and is satisfied that the provisions of this Part 2
are both necessary and reasonable for the protection of the
legitimate business interests of S&L, the Purchaser and the
Company, and that the provisions reflect the mutual desire and
intent of Skollsberg and S&L, the Purchaser and the Company
and should be upheld in their entirety and be given full force
and effect.
2.6 INVESTMENTS PERMITTED. Nothing in this Part 2 will prevent Skollsberg
from directly or indirectly owning up to an aggregate of 5% of the issued
capital stock of any public company, the price of whose shares is quoted in a
published newspaper of general circulation.
2.7 CONSIDERATION. As consideration for the covenants and
acknowledgements of Skollsberg set out in this Part 2, S&L will pay to
Skollsberg a fee equal to Cdn. $13,350 per month for each month of the
Restricted Period, such fee to be paid to Skollsberg on the last day of each
month.
2.8 NO DEFENSE. The existence of any claim, or cause of action, of
Skollsberg against any of S&L, the Purchaser or the Company, whether under this
Agreement (including pursuant to Section 2.7) or any other agreement, will not
constitute a defence to the enforcement by S&L, the Purchaser and the Company of
any of the terms of this Part 2.
2.9 VENDOR COVENANT. The Vendor covenants with S&L, the Purchaser and the
Company to cause Skollsberg to comply in all respects with his obligations under
this Part 2.
PART 3
PURCHASER'S AND S&L'S REPRESENTATIONS AND WARRANTIES
In order to induce the Vendor and Skollsberg to enter into this Agreement, the
Purchaser and S&L agree as follows:
3.1 STATUS OF PURCHASER. The Purchaser is a corporation duly incorporated
under the Business Corporations Act (Yukon), is a valid and subsisting
corporation and is in good standing with respect to the filing of annual returns
required under that Act.
3.2 AUTHORIZATION - PURCHASER. The Purchaser has the requisite corporate
power and capacity to enter into the transactions contemplated by this
Agreement, and to perform its obligations hereunder, and the execution and
delivery or observance or performance of this Agreement is not a contravention
or breach of the constating documents or resolutions of directors and
shareholders of the Purchaser or the terms of any agreement, trust or other
document or any Requirement of Law applicable to the Vendor and this Agreement
has been duly authorized by all necessary corporate action on the part of the
Purchaser and constitutes valid and legally binding obligations of the
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Purchaser enforceable against it in accordance with its terms, subject to the
fact that specific performance is an equitable remedy available only in the
discretion of the courts.
3.3 STATUS OF S&L. S&L is a corporation duly incorporated under the laws
of Ohio and is a valid and subsisting corporation.
3.4 AUTHORIZATION - S&L. S&L has the requisite corporate power and
capacity to enter into the transactions contemplated by this Agreement, and to
perform its obligations hereunder, and the execution and delivery or observance
or performance of this Agreement is not a contravention or breach of the
constating documents or resolutions of directors and shareholders of S&L or the
terms of any agreement, trust or other document or any Requirement of Law
applicable to the Vendor and this Agreement has been duly authorized by all
necessary corporate action on the part of S&L and constitutes valid and legally
binding obligations of S&L enforceable against it in accordance with its terms,
subject to the fact that specific performance is an equitable remedy available
only in the discretion of the courts.
3.5 ABSENCE OF CONFLICTING AGREEMENTS. The performance of this Agreement
will not be in violation of the constating documents of the Purchaser and S&L
nor of any agreement or material contract to which the Purchaser or S&L is a
party and will not give any Person any right to terminate or cancel any
agreement of the Purchaser and/or S&L nor this Agreement.
3.6 DISCLOSURE. No representation or warranty of the Purchaser made in
this Agreement omits to state a material fact necessary to make the statement,
in light of the circumstances in which they were made, not misleading.
PART 4
VENDOR AND SKOLLSBERG'S
REPRESENTATIONS AND WARRANTIES
In order to induce the Purchaser and S&L to enter into this Agreement and the
Share Purchase Agreement, the Vendor and Skollsberg agree as follows:
4.1 STATUS OF VENDOR. The Vendor is a corporation duly incorporated,
validly existing, and in good standing with respect to annual filings under the
laws of the Province of British Columbia.
4.2 CAPACITY OF VENDOR. The Vendor has the requisite power and capacity
to enter into this Agreement and to perform its obligations hereunder and the
execution, delivery or observance or performance of this Agreement is not a
contravention or breach, or will not be a contravention or breach, of the
constating documents or resolutions of directors and shareholders of the Vendor
or the terms of any agreement, trust or other document or any lawful requirement
of the Xxxxxx.
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- 0 - Xxxxxxx 00 (x)
4.3 AUTHORIZATION AND BINDING EFFECT OF AGREEMENT. This Agreement has
been duly authorized in the case of the Vendor and the Company and duly executed
and delivered by each of the Vendor, Skollsberg and the Company and constitutes
valid and legally binding obligations of the Vendor, Skollsberg and the Company,
enforceable against each of them in accordance with its terms, subject to the
fact that specific performance is an equitable remedy available only in the
discretion of the courts.
PART 5
SET-OFF
5.1 SET-OFF. If, under this Agreement or under the Share Purchase
Agreement, Skollsberg becomes obligated to pay any sum of money to S&L, the
Purchaser or the Company, then Skollsberg hereby agrees that, after he and the
Vendor have been given reasonable notice and the right to pay directly:
(a) if the amount is the proper subject of a Claim, is bona fide
and is owed to S&L, then such amount may, at S&L's election,
and without limiting or waiving any right or remedy of S&L
under this Agreement, be set-off against amounts owing by S&L
to Skollsberg pursuant to this Agreement; or
(b) if the amount is the proper subject of a Claim, is bona fide
and is owed to the Purchaser or the Company, Skollsberg hereby
irrevocably directs S&L to pay to the Purchaser or Company, as
the case may be, such amount and then such amount may, at
S&L's election, and without limiting or waiving any right or
remedy of S&L under this Agreement, be set-off against amounts
owing by S&L to Skollsberg pursuant to this Agreement.
PART 6
DISPUTE RESOLUTION
6.1 NEGOTIATION, MEDIATION, ARBITRATION.
(a) will first be attempted to be resolved by the Parties through
good faith negotiations and in connection therewith, any Party
may request in writing that the other Party or Parties meet
and commence such negotiations within a reasonable period of
time (in no event later than seven (7) days) after such
request;
(b) if within seven (7) days after commencement of negotiations
under Section 6.1(a) above the Parties cannot come to
agreement, the Parties will attempt to resolve the
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dispute by mediated negotiation and will use best efforts to
agree on the choice of mediator within seven (7) days of a
request for mediation by one Party to the others;
(c) if the matter cannot be resolved by mediation within fourteen
(14) days of appointment of a mediator, or if the Parties
cannot agree on a mediator within seven (7) days of a request
of a Party to appoint a mediator, the matter will be referred
to arbitration in accordance with the provisions set out
below;
(d) any dispute between the Parties which cannot be settled by
negotiation or mediation will be determined by arbitration in
accordance with the Commercial Arbitration Act (British
Columbia) and arbitration will be the exclusive method for
final resolution of such dispute;
(e) there will be a single arbitrator who will be disinterested in
the dispute or controversy and will be impartial with respect
to all Parties hereto. If the Parties cannot agree on an
arbitrator within seven (7) days of the dispute going to
arbitration pursuant to Section 6.1(c) above, the appointment
will be according to the Commercial Arbitration Act (British
Columbia);
(f) the determination of the arbitrator will be final and binding
on the Parties;
(g) each Party will bear its own costs in any such arbitration,
provided that, if the arbitrator finds that any Party will
have acted unreasonably he may, in his discretion, award costs
against such Party;
(h) the arbitrator will have the discretionary authority to grant
injunctive relief and specific performance as may be requested
by a Party;
(i) any order of an arbitrator may be entered with a Court of
competent jurisdiction for the purposes of enforcement;
(j) the place of arbitration will be Vancouver;
(k) the arbitrator will give effect insofar as possible to the
desire of the Parties hereto that the dispute or controversy
be resolved in accordance with good commercial practice; and
(l) the arbitrator will decide such dispute in accordance with the
laws of the Province of British Columbia.
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PART 7
GENERAL
7.1 GENDER AND NUMBER. Words of one gender include all genders, and words
in the singular include the plural and vice versa.
7.2 INTERPRETATION NOT AFFECTED. In this Agreement, using separate Parts
and inserting headings are for convenient reference only and will not affect how
this Agreement is interpreted.
7.3 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with British Columbia laws and applicable Canadian law and will be
treated in all respects as a British Columbia contract.
7.4 SUBMISSION TO JURISDICTION. Each of the Parties will:
(a) submit to the jurisdiction of British Columbia;
(b) if not resident, incorporated or registered in British
Columbia, appoint an agent to receive service of any process
in British Columbia; and
(c) if any appointed agent is required, notify the other Parties
of the name and address of its appointed agent.
7.5 SEVERABILITY. The invalidity, illegality, or unenforceability of any
provision of this Agreement will not affect the validity, legality, or
enforceability of any other provision of this Agreement.
7.6 ENUREMENT. This Agreement will enure to the benefit of and will be
binding upon the Parties and their respective heirs, executors, administrators,
successors and assigns.
7.7 ASSIGNMENT. The Vendor acknowledges and agrees that the Purchaser may
assign its rights and obligations under this Agreement to a nominee of the
Xxxxxxxxx.
00
- 00 - Xxxxxxx 00 (x)
7.8 COUNTERPART. This Agreement may be signed by original or by facsimile
in one or more counterparts and upon execution in counterparts by each Party
hereto, such counterpart will constitute an original of this Agreement and
execution and delivery by facsimile will be legally binding upon the Parties.
TO EVIDENCE THEIR AGREEMENT each of the Parties has executed this Agreement as
of the date set out on the initial page hereof.
XXXXX HOLDINGS LTD. 19035 YUKON INC.
per: __________________________ per: __________________________
OSCAR SKOLLSBERG'S FOOD XXXXXXX & XXXXXX, INC.
TECHNIQUE LIMITED
per: __________________________ per: __________________________
--------------------------------
JAN SKOLLSBERG
