INTERBREW SERVICES AGREEMENT
EXHIBIT
4.20
INTERBREW
SERVICES AGREEMENT
THIS
AGREEMENT
made the
27th
day of
August, 2004,
BETWEEN:
INTERBREW
S.A.,
a
public limited liability company organized under the laws of the Kingdom of
Belgium (“Interbrew”)
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and
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LABATT
BREWING COMPANY LIMITED,
a
corporation existing under the laws of Canada (“LBCL”)
WHEREAS:
A. Interbrew
and LBCL have entered into a services agreement dated October 31, 2001 (the
“Existing
Agreement”), pursuant
to which Interbrew has agreed to provide certain services to LBCL on the terms
and conditions specified in such Existing Agreement.
B. Interbrew
and LBCL are parties to an Incorporação Agreement dated as of March 3, 2004, as
amended (the “Incorporação
Agreement”)
among
Companhia de Bebidas das Américas - AmBev (“AmBev”),
Interbrew, LBCL and Labatt Brewing Canada Holding Ltd., which requires, in
Section 5.01(c) thereof, that Interbrew, AmBev and LBCL use their respective
commercially reasonable efforts to negotiate in good faith new intercompany
agreements between Interbrew and certain of its subsidiaries as may be necessary
or advisable, on mutually agreeable terms.
C. Having
regard to the aforementioned requirements of the Incorporação Agreement and the
corporate and economic structure of Interbrew, LBCL and AmBev that will result
from the completion of the transactions contemplated by the Incorporação
Agreement (including the anticipated provision by AmBev of certain services
formerly performed by Interbrew), Interbrew and LBCL desire to terminate the
Existing Agreement as of the Closing Date (as defined below) and to enter into
this agreement for the provision of Services (as defined below) on the terms
and
conditions set forth herein.
NOW
THEREFORE THIS AGREEMENT WITNESSES that
in
consideration of the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto have agreed as
follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
1.1 Definitions. In
this
Agreement:
| (a) |
“Agreement” means
this agreement and all schedules attached to this agreement, in
each case as they may be amended or supplemented from time to time,
and
the
expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and
similar expressions
refer to this agreement and, unless otherwise indicated, references
to
Articles and Sections are to Articles and Sections in this
agreement;
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| (b) |
“Business
Day” means
any day, other than a Saturday or Sunday, on which the principal
commercial banks located in the cities of Toronto and Brussels are
open
for business during normal banking
hours;
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| (c) |
“Closing
Date”
has the meaning ascribed thereto in the Incorporação
Agreement;
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| (d) |
“Services”
means the services to be provided by Interbrew to LBCL hereunder,
as
determined by the parties hereto in accordance with Section
2.3(a);
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| (e) |
“Term”
has the meaning ascribed thereto in Section
3.1;
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1.2 Number
and Gender.
Words
importing the singular include the plural and vice versa and words importing
gender include all genders.
1.3 Headings.
The
division of this Agreement into articles and sections and the insertion of
headings and subheadings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.4 Severability.
Each of
the provisions contained in this Agreement is distinct and severable and a
declaration of invalidity, illegality or unenforceability of any such provision
or part thereof by a court of competent jurisdiction shall not affect the
validity or enforceability of any other provision hereof.
1.5 Currency.
All
amounts of money set forth herein are expressed in EUROS.
1.6 Schedules.
The
following Schedule is attached to, and forms an integral part of, this
Agreement:
Schedule
“A”: Services that may be Provided by Interbrew and Applicable Fees
1.7 Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof. This Agreement supersedes all prior or concurrent
agreements,
promises, covenants, arrangements, representations or warranties,
communications
or
proposals, whether oral or written, between the parties relating to the subject
matter hereof. There are no representations, warranties, terms, conditions,
undertakings or collateral
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agreements,
express, implied or statutory, between the parties other than those expressly
set forth in this Agreement.
ARTICLE
2
SERVICES
2.1 Termination
of Existing Agreement.
LBCL
and Interbrew hereby confirm and agree that
the
Existing Agreement is terminated as at the Closing Date and that it shall be
of
no further
force or
effect as of the Closing Date; it being understood that LBCL shall remain liable
for payment
to Interbrew, and shall forthwith pay to Interbrew, any and all amounts due
and
owing
to
Interbrew in accordance with the provisions of the Existing
Agreement.
2.2 Services.
LBCL
hereby engages Interbrew and Interbrew hereby covenants to provide the Services,
from and after the Closing Date, in accordance with the terms and conditions
set
forth in this Agreement. Interbrew shall, throughout the Term, diligently and
continuously provide the Services to LBCL using due care and in a prompt and
efficient manner to the satisfaction of LBCL, acting reasonably. Interbrew
shall
provide and make available as necessary
such professional, supervisory, managerial, administrative and other personnel
as, in lnterbrew’s
discretion, are necessary to perform the Services, which personnel may, but
need
not
be,
officers or employees of Interbrew or one of its affiliates. Such personnel
shall be qualified and experienced in the duties to which they are assigned.
It
is the express intention of the parties hereto that the terms and conditions
hereof, including payment terms, shall be arm’s length in all
respects.
2.3 Determination
of Services and Payment.
The
parties hereto agree as follows in respect
of the
provision of Services and the invoicing and payment of fees in respect
thereof:
| (a) |
The
Services which may be provided by Interbrew hereunder, the fees to
be paid
by LBCL as consideration therefor, the purchases which may be made
by
Interbrew on LBCL’s behalf and the applicable Interbrew xxxx-ups on the
costs thereof from the Closing Date to and including December 31,
2004 are
set out in Schedule “A”
hereto.
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| (b) |
The
Services actually to be rendered by Interbrew hereunder during the
term
shall be determined by the parties from time to time. No Services
shall be
rendered by Interbrew
hereunder without the prior written authorization of the Chief
Financial
Officer of
LBCL. LBCL shall have no obligation to pay for any Services rendered
by Interbrew in the absence of such prior written
authorization.
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| (c) |
Services
provided by Interbrew hereunder may be provided, in whole or in part,
by
certain employees of LBCL (the “Corporate
Employees”)
who
are expected to
spend more than fifty percent (50%) of their working time rendering
services to
Interbrew and in respect of whom one hundred percent (100%) of LBCL’s
employment costs and other operating costs are invoiced to Interbrew
(in
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Canadian dollars) in accordance with the Labatt
Services Agreement of even date herewith. One hundred percent (100%)
of
the costs associated with such Corporate Employees are included in
the
fees specified in Schedule “A”
hereto.
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| (d) |
On
or before October 29, 2004 and January 28, 2005, and
thereafter
(if the Term is extended) on or before the twentieth (20th)
Business Day of April, July, October and January of each year during
the
Term, Interbrew shall transmit to LBCL an invoice setting out Interbrew’s
fees for its provision of Services during the previous calendar quarter
(each, an “Interbrew
Invoice”).
LBCL shall pay to Interbrew all amounts owing under each Interbrew
Invoice
within twenty (20) days following the end of the month in which LBCL
received such Interbrew Invoice. Each Interbrew Invoice shall include
a
report of the Services provided (including the hours spent by Interbrew
in
the provision thereof) and any and all purchases made by Interbrew
on
behalf of LBCL in the course or in respect thereof. For Services
in
respect of which the parties have agreed to a flat fee, each Interbrew
Invoice shall include a portion of such fee in respect of the Service
in
question provided during the calendar quarter to which the Interbrew
Invoice relates.
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2.4 Taxes.
LBCL
shall pay any and all applicable sales, use, value-added or other similar taxes
and any similar charges payable upon or in connection with the provision of
Services hereunder. Any and all payments made by LBCL to Interbrew under this
Agreement shall be made free and clear of, and without deduction for, any taxes
imposed upon income generated by provision of the Services, which taxes are
required to be withheld at source, provided that if LBCL shall be required
to
deduct such taxes from payments, then the amount payable shall be increased
as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.4), Interbrew
receives an amount equal to the sum it would have received had no such
deductions been made.
ARTICLE
3
TERM
AND TERMINATION
3.1 Term.
The
term (the “Term”)
of
this Agreement shall commence on the Closing Date and shall end at the close
of
business on December 31, 2004, unless terminated earlier in accordance
with
the provisions of this Article 3. The Term may be extended by the mutual
written consent of the parties hereto.
3.2 Termination
without Cause. To
the
extent that this Agreement is extended by the mutual
written consent of the parties hereto, it may be terminated without cause after
December
31, 2004
by either party upon three (3) months’ prior written notice to the other
party.
3.3 Termination
for Cause.
This
Agreement may be terminated by either party immediately in the event that the
other party:
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| (a) |
fails
to cure a material breach of its obligations hereunder within thirty
(30)
days after receiving notice of the breach;
or
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| (b) |
becomes
insolvent or the subject of bankruptcy or insolvency proceedings,
commits
an act of bankruptcy, makes any assignment for the benefit of its
creditors or a receiver is appointed for its business or any part
of its
property.
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3.4 Consequences
of Termination.
In the
event that this Agreement expires or is terminated in accordance with this
Article 3, (a) all Services will promptly cease and (b) LBCL
shall
forthwith
pay to Interbrew any and all amounts due and owing to Interbrew as required
pursuant
to the
terms of this Agreement (or at such time as payment is required pursuant to
Section 2.3(d)), and no rights already accrued hereunder shall be
affected.
ARTICLE
4
INDEMNIFICATION
4.1 Indemnity.
Interbrew shall hold LBCL harmless and shall indemnify LBCL from and against
any
and all claims, loss, damage, harm, liability, cost or expense (including
reasonable legal fees) (collectively, “Losses”)
incurred by LBCL in any way arising out of, caused by or resulting from any
grossly negligent act or omission of Interbrew in respect of the provision
of
Services or the grossly negligent performance or non-performance of any other
duties or obligations of Interbrew hereunder. Interbrew’s obligations under this
Section 4.1 shall: (i) survive
the termination of this Agreement for a period of one (1) year, (ii) not
be
applicable to any liability caused by the fault, negligence or wilful misconduct
of LBCL or its directors, officers, employees or agents, and (iii) not
be
applicable to any Losses resulting from events listed in Section 5.5. In no
event shall Interbrew be liable to LBCL for indirect, incidental, special or
consequential losses or damages of any kind (including, but not limited to,
loss
of profits,
business, data, information, opportunities or use), whether arising as a result
of breach of
contract, tort or otherwise. Notwithstanding the foregoing and any other
provision of this Agreement, Interbrew’s aggregate liability to indemnify LBCL
in accordance with this Section 4.1 shall in no event exceed the aggregate
amount of fees received by Interbrew under this Agreement during the twelve
(12)
month period prior to and including the date on which indemnification is
claimed.
ARTICLE
5
MISCELLANEOUS
5.1 Notices.
All
notices, requests, demands, invoices or other communications required or
permitted under this Agreement shall be in writing and (a) delivered
by
messenger; (b) transmitted by facsimile or electronic mail; or
(c) delivered by a reputable international courier service, with courier
charges paid or payable by the sender. All such notices and other communications
shall be addressed as follows to the parties at the respective addresses set
forth
below or
to such other address as any party may hereafter specify in
writing:
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| (a) |
In
the case of notice to Interbrew,
to:
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Xxxxxxxxxxx
00
00-0000,
Xxxxxx
Xxxxxxx
Attention:
General Counsel
Telephone: x00-00-00-00-00
Fax:
x00-00-00-00-00
| (b) |
In
the case of notice to LBCL, to:
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Xxxxxx Xxxxx
Xxxxx 000
000 Xxxxx’s Quay West
Toronto,
Ontario
Canada
M5J 1A7
Attention: Vice President, Legal
Telephone: (000)
000-0000
Fax:
(000)
000-0000
A
notice
shall be deemed to have been given: (i) on the date of delivery (evidenced
by a
signed receipt) if delivered by messenger; (ii) two Business Days after it
has
been delivered to a reputable international courier service with courier charges
paid or payable by the sender; or (iii) on the day sent by facsimile or
electronic mail, if the transmission is confirmed by the sender’s facsimile or
computer server.
5.2 Amendment;
Waiver.
Except
as expressly provided in this Agreement, no amendment or waiver of all or any
part of this Agreement shall be binding unless executed in writing by the party
or parties to be bound thereby. No waiver of any provision of this Agreement
shall constitute a waiver of any other provision and no waiver of any provision
of this Agreement shall constitute a continuing waiver, in either case unless
otherwise expressly provided therein.
5.3 Independent
Contractors.
It is
expressly understood and agreed that, in performing the Services for LBCL,
(i) Interbrew shall be acting, and shall at all times act, as an
independent contractor and (ii) Interbrew’s employees shall not be
considered as employees, servants or agents of LBCL. This Agreement shall not
constitute Interbrew as an employee, agent, partner or joint venturer of or
with
LBCL and no such relationship shall arise or subsist between Interbrew and
LBCL
at any time during the Term. Each party hereto acknowledges and agrees that
it
does not have, and will not exercise or purport to exercise or hold itself
out
to any person as having, any authority to enter into or conclude any contract
or
to undertake any commitment or obligation for, in the name of or on behalf
of
the other party.
5.4 Further
Assurances.
The
parties hereto and each of them agree to make, do, execute, endorse, acknowledge
and deliver or cause and procure to be made, done, executed, endorsed,
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acknowledged,
filed, registered and delivered any and all further acts and assurances and
to
take all such other action as may be required or desirable to complete the
transactions contemplated herein.
5.5 Force
Majeure.
Interbrew shall not be responsible to LBCL for any non-performance or delay
in
performance occasioned by any causes beyond its control, including, without
limitation, acts or omissions of LBCL, acts of civil or military authority,
changes in laws or regulations, strikes, lock-outs, embargoes, insurrections
or
acts of God.
5.6 Governing
Law.
This
Agreement shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the laws of the State of New York, and the
parties hereby consent to the exclusive jurisdiction of the courts of the State
of New York to hear and determine any and all disputes, actions and proceedings
arising out of this Agreement.
5.7 Counterparts. This
Agreement may be executed in separate counterparts, each of which will be deemed
to be an original of this Agreement and all of which, when taken together,
will
be deemed to constitute one and the same agreement.
5.8 Successors
and Assigns.
This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Interbrew shall be
entitled to assign this Agreement to any affiliate of Interbrew upon providing
prior written notice to LBCL of such assignment.
[Remainder
of page intentionally left blank.]
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IN
WITNESS WHEREOF
the
parties hereto have duly executed this Agreement.
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INTERBREW
S.A.
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By:
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/s/
Xxxxxxxxx Noirfalisse
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Name: Xxxxxxxxx
Noirfalisse
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Title: Legal
Counsel
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By:
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/s/
Xxxxxx Xxxxxx
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Name: Xxxxxx
Xxxxxx
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Title: Vice
President Planning and Control
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LABATT
BREWING COMPANY LIMITED
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By:
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/s/
Xxxxx X. Xxxx
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Name: Xxxxx
X. Xxxx
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Title: Vice
President
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By:
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/s/
Thornburn
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Name: Xxxxx
Xxxxxxxxx
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Title: Director
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IN
WITNESS WHEREOF
the
parties hereto have duly executed this Agreement.
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INTERBREW
S.A.
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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LABATT
BREWING COMPANY LIMITED
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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SCHEDULE
“A”
SERVICES
THAT MAY BE PROVIDED BY INTERBREW AND APPLICABLE
FEES
| 1. |
Internal
audit support services at a fee of 139 Euro per hour
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| 2. |
Legal
advice at a fee of 139 Euro per hour
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Including:
| - |
general
legal advice
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| - |
follow
up and assistance in litigation or in the context of disputes,
and
administrative arbitration
proceedings
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| - |
specialized
assistance in international commercial
law
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| - |
assistance
with preparation of contracts and other documents of legal
nature
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| - |
specialized
services in mergers & acquisitions
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| - |
specialized
services in competition law matters
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| - |
assistance
in obtaining export and import licenses as well as other
licenses
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| - |
code
of conduct/compliance oversight
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| - |
corporate
governance
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| 3. |
Public
relations advice at a fee of 139 Euro per hour
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Including
but not limited to:
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Advice
on and assistance with communications to personnel, the public
and
governmental or administrative
authorities
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| 4. |
Advice
on risk management at a fee of 139 Euro per hour
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Including:
| - |
Advice
on or management of all or part of any required coverage against
damages,
risks, civil liabilities and legal
proceedings
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| - |
negotiation
of insurance contracts
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administration
of policies and claims
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| 5. |
IT
support cost - flat fee of 260.000 Euro from the date hereof until
31
December 2004
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Including:
| - |
Co-ordination
of ERP and EBI activities, Meta Data management and project
planning
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| - |
Co-ordination
of ERP and EBI activities, Meta Data management and project
planning
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| - |
support
of ERP implementation phase 2 and 3
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| - |
support
of standardization and synchronization of SAP CCC initiatives with
the
Canadian business
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| - |
SAP
HR evaluation and implementation support
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| - |
Communication,
set up and support of the business intelligence
program
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| - |
design
of global infrastructure standards
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| - |
access
to global network and global
backbone
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| - |
provision
of global security standards
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operation
of global portal (xxxxxxxxxxx.xxx) and support for the deployment
of the
xxxxxxxxx.xxx global standards in
Canada.
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| 6. |
HR
support services at a fee of 139 Euro per hour
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Including
but not limited to:
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advice
on salaries, wages and benefits and reward
systems
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advice
on negotiation with unions
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advice
and coordination of training and employee
development
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| 7. |
Technical
support services at a fee of 139 Euro per hour
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Including
but not limited to:
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technical
services, technical skill transfer, value engineering , problem
solving,
fire fighting and knowledge management and access to technical
library
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| - |
laboratory
analysis and cooperative tests of
products
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technological
audits
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advice
on the purchase and use of raw materials, equipment, spare parts
and
machinery
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project
engineering
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training
of staff
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tasting
and sensory analysis
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research
and development services for projects for the sole use and benefit
of LBCL
and its subsidiaries
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| 8. |
Marketing
and Sales support services at a fee of 139 Euro per
hour
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Including
but not limited to:
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assistance
on marketing research
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advice
on marketing and promotions
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advice
on distribution and sales for both the on- and off-trade segments
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training of staff
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| 9. |
Pension
management at a fee of 139 Euro per hour
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Including:
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advice
on pension governance, pension asset risk controlled return
maximization
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ensuring
compliance with local regulations
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development
and maintenance of asset manager performance
analysis
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administration
of pension plan, support reporting and control of pension expenses
and
contributions
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work
with local pension bodies on local pension issues and hire/fire
managers
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| 10. |
Tax
support services at a fee of 139 Euro per hour
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Including
but not limited to:
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general
tax advice
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| 11. |
Purchases
made on behalf of LBCL - re-invoiced at cost of purchase plus 2%
xxxx-up
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