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EXHIBIT 10.2
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made on 20th November 1997.
BETWEEN:
(1) THE PERSONS whose names and addresses are set out in column 1 of Schedule 1
("the Vendors").
(2) COTT UK LIMITED (Company No:2836071) whose registered office is at 0
Xxxxxxx Xxxx, Xxxxxx, XX0 0XX ("the Purchaser").
(3) COTT CORPORATION a corporation incorporated under the laws of Canada under
company number 010776-0 having its principal place of business at 000
Xxxxx'x Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 ("the
Parent").
IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
words and expressions shall bear the following meanings:
"`A' SHARES" means the twenty five thousand (25,000)
issued "A" Ordinary Shares of 10 xxxxx
each in the capital of the Company fully
paid or credited as fully paid.
"ADJUSTED NET ASSETS" means the amount at the Completion Date
by which the fixed and current assets of
the Group Companies as shown in the
Completion Balance Sheet exceeds the
aggregate of the liabilities (being the
actual, contingent and prospective
liabilities so far as they can be
quantified whether current or not, as
shown therein but excluding the Existing
Group Loan Stock) as agreed or
determined pursuant to Clause 5 of this
Agreement.
"APPROPRIATE MANNER" means as agreed by the parties,
negotiating in good faith either in
person or through their nominated
advisors or, in default of such
agreement within 20 Business Days of
commencement of such negotiations, as
determined by an Expert nominated at any
time thereafter on the request of the
Vendors or the Purchaser (as the case
may be) and in accordance with Clause
16.
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"ASSOCIATE" means in respect of any person ("the
first person") any person which is a
connected person (as defined in Section
839 ICTA) of the first person, or which
is an associated company of the first
person within the meaning of Section 416
ICTA but as if in sub-section (2) of
that Section there was substituted for
the words "the greater part" wherever
they appear the words "twenty five per
cent or more".
"`B' SHARES" means the two hundred and twenty one
thousand, four hundred and sixty nine
(221,469) issued "B" Ordinary Shares of
10 xxxxx each in the capital of the
Company, fully paid or credited as fully
paid.
"BUSINESS DAY" means any day other than Saturdays,
Sundays and bank holidays during which
clearing banks are open for business in
the City of London.
"CA 1985" means the Companies Xxx 0000.
"CA 1989" means the Companies Xxx 0000.
"COMPANIES ACTS" means CA 1985 and CA 1989 and the former
Companies Acts (within the meaning of
Section 735(1) CA 1985).
"COMPANY" means Hero Drinks Group (UK) Limited
brief details of which are set out in
Part 1 of Schedule 2.
"COMPANY INTELLECTUAL
PROPERTY RIGHTS" means all Intellectual Property Rights
(whether or not registered or
registerable), which are used in the
carrying on of the business of the
Company in the manner in which it is
carried on as at the date of this
Agreement, other than the Registered
Company Intellectual Property Rights and
any intellectual property rights
licensed to the Company by Hero or
otherwise owned by Hero.
"COMPLETION" means completion of the sale and
purchase of the Shares in accordance
with Clause 7.
"COMPLETION BALANCE SHEET" means the balance sheet of the Company
as at the close of business on the
Completion Date to be prepared in
accordance with Clause 5.
"COMPLETION DATE" means the date hereof.
"`C' SHARES" means the seven hundred and fifty-three
thousand, five hundred and thirty-one
(753,531) issued "C" Ordinary Shares of
10 xxxxx each in the capital of the
Company fully paid or credited as fully
paid.
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"CONSIDERATION" means the consideration payable by the
Purchaser for the Shares representing
the aggregate of the Initial
Consideration and the Further
Consideration (subject to any adjustment
provided for in this Agreement).
"CRYSTAL DRINKS" means Crystal Drinks Limited (Company No
2186825).
"DISCLOSURE LETTER" means the letter of even date herewith
in the Agreed Form from the Vendors to
the Purchaser disclosing exceptions to
the Warranties.
"DISCLOSED DOCUMENTS" means the documents referred to in the
list of documents in the Agreed Form
annexed to the Disclosure Letter.
"EBIT" has the meaning provided in paragraph 5
of Schedule 3.
"ENVIRONMENT" and "POLLUTION
OF THE ENVIRONMENT" have the meanings attributed to them by
s.1 of the Environmental Protection Xxx
0000.
"ENVIRONMENTAL LAW" means all laws, regulations, codes of
practice, circulars, guidance notes
(statutory or otherwise) and the like
from time to time (whether in the United
Kingdom or elsewhere) concerning the
protection of human health or the
environment or the conditions of the
work place or the generation,
transportation, storage, treatment or
disposal of any hazardous material,
including, for the avoidance of doubt,
the Contaminated Land Regime under Part
IIA Environmental Protection Act 1990
and guidance pursuant thereto.
"EXISTING GROUP LOAN STOCK" the Loan Stock in the nominal amount of
(pound)29,600,000 owing from the Company
to Xxxxxxx Xxxxx Limited, constituted by
a loan stock instrument dated 19
November 1997.
"EXPERT" means an independent firm of chartered
accountants agreed upon by the Vendors
and the Purchaser or, failing such
agreement within 14 days of request by
any party to this Agreement nominated by
the Institute of Chartered Accountants
in England and Wales.
"FA" means Finance Act.
"THE FINAL SALARY SCHEME" means the Hero Drinks Group Retirement
and Death Benefits Scheme established by
a preliminary trust deed dated 24 March
1972.
"FURTHER CONSIDERATION" means the further consideration payable
for the Shares as defined in paragraph 1
of Schedule 3.
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"GROUP COMPANIES" means the Company and the companies,
brief details of which are set out in
Schedule 2 and "Group Company" means any
one of such companies.
"GROUP PERSONAL PENSION PLAN" means each of the personal pension
policies effected with National
Provident to which the Company
contributes in relation to employees of
the Company collectively known as the
Hero Drinks Group (UK) Limited Group
Personal Pension Plan.
"HAZARDOUS MATERIAL" means any natural or artificial
substance (whether in solid or liquid
form or in the form of a gas or vapour
and whether alone or in combination with
any other substance) capable of causing
harm to man or any other living organism
supported by the environment, or
damaging the environment or public
health or welfare including but not
limited to any controlled, special,
hazardous, toxic or dangerous waste.
"HERO" means Hero brief details of which are
set out in Schedule 1.
"HOLDING COMPANY" means a holding company as defined in
Section 736 CA 1985 (as supplemented by
Section 736A CA 1985).
"ICTA" means the Income and Corporation Taxes
Xxx 0000.
"INITIAL CONSIDERATION" means the initial consideration amount
to be paid to the Vendors or into the
Retention Account on Completion by or on
behalf of the Purchaser in respect of
the purchase of the Shares (being a
payment on account of the Consideration
in the sum of (pound)17,400,000
(seventeen million, four hundred
thousand pounds)), such payment to be
satisfied in the manner specified in
Clause 4.2.
"3I LOAN" means loans totalling in aggregate
(pound)1,494,000 formerly owed to 3i plc
by the Company which loans have been
repaid by the Company prior to the date
of this Agreement.
"3I PENALTY" means the amount of any penalty imposed
on the Company by 3i plc on account of
the early repayment of the 3i loan.
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"INTELLECTUAL PROPERTY RIGHTS" means all patents, trade marks, service
marks, registered designs, utility
models, design rights, copyright
(including copyright in computer
software), semi-conductor topography
rights, inventions, trade secrets and
other confidential information,
know-how, business or trade names and
all other intellectual and industrial
property and rights of a similar or
corresponding nature in any part of the
world, whether registered or not or
capable of registration or not and
including the right to apply for and all
applications for any of the foregoing
rights and the right to xxx for past
infringements of any of the foregoing
rights.
"INTELLECTUAL PROPERTY LICENCE" means the licence to be entered into at
Completion between Hero (1) and the
Purchaser (2) relating to the use of
certain trade marks owned by Hero in the
Agreed Form.
"LAST ACCOUNTS" means the audited balance sheet of the
Company as at the Last Accounts Date and
the audited profit and loss account of
the Company made up to the Last Accounts
Date and (in each case) the auditor's
and the directors' reports and notes
thereon.
"LAST ACCOUNTS DATE" means 31 December 1996.
"MANAGEMENT ACCOUNTS" means the unaudited balance sheet and
profit and loss account of the Company
for the 10 month period ended 31 October
1997.
"NET ASSET THRESHOLD" means the sum of (pound)37,896,000
(thirty seven million eight hundred and
ninety six thousand pounds) less the
amount of the 3i Penalty.
"NEW COTT" the combined group of companies
comprising (i) the Purchaser (ii)
Crystal Drinks and (iii) the Group
Companies together representing all the
trading activities of the Purchaser's
Group in the United Kingdom following
Completion.
"PENSION SCHEMES" means the Final Salary Scheme and the
Group Personal Pension Plan.
"PHI SCHEME" means the permanent health insurance
scheme insured with Sun Life of Canada
under policy number 74297-GPH.
"PLANNING ACTS" means the Town and Country Planning Xxx
0000, the Planning (Listed Buildings and
Conservation Areas) Xxx 0000, the
Planning (Consequential Provisions) Xxx
0000, the Planning (Hazardous
Substances) Xxx 0000 and the Planning
(Compensation) Xxx 0000, and any other
statute or subordinate legislation
relating to town and country planning.
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"PRE-COMPLETION DIVIDEND" means the dividend of (pound)4,800,000
(four million eight hundred thousand
pounds) paid by the Company prior to the
date of this Agreement.
"PROPERTIES" means the Properties of the Group
Companies briefly described in Part 1 of
Schedule 6 (and for the purpose of the
Warranties relating to environmental
matters includes all plant, equipment,
machinery, storage vessels, pipes,
cables and associated apparatus present
at, upon, in or underneath the
Properties).
"PURCHASER'S ACCOUNTANTS" means Coopers & Xxxxxxx of 0 Xxxxxxxxxx
Xxxxx, Xxxxxx, XX0X 0XX.
"PURCHASER'S GROUP" means the Purchaser, its holding
companies and the subsidiaries and the
subsidiary undertakings from time to
time of such holding companies, all of
them, and each of them as the context
admits.
"PURCHASER'S SOLICITORS" means Xxxxxxx Suddards, of 0 Xxxx Xxxx,
Xxxxx, Xxxx Xxxxxxxxx, XX0 0XX.
"REGISTERED COMPANY
INTELLECTUAL PROPERTY
RIGHTS" means those registered Intellectual
Property Rights and applications for
registered Intellectual Property Rights
listed in Schedule 10.
"REORGANISATION" means the reorganisation of New Cott
involving (a) the transfer of the export
business of the Purchaser to Cott Europe
Trading Limited (b) the transfer of the
business, assets and liabilities of the
Company to the Purchaser (c) the grant
of a long lease of the fixed assets of
Crystal Drinks to the Purchaser
comprising its premises, plant and
machinery and industrial property
rights, together with an option in
favour of the Purchaser to purchase
certain of such assets, and (d) the
transfer of the stock and work in
progress of Crystal Drinks to the
Purchaser.
"THE RETENTION" means the sum of (pound)1,900,000 (one
million nine hundred thousand pounds) to
be retained by the Purchaser out of the
Initial Consideration and to be dealt
with in accordance with Clause 4.4.
"THE RETENTION ACCOUNT" means an interest bearing account in the
joint names of the Purchaser's
Solicitors and the Vendors' Solicitors
with Lloyds Bank PLC of 0 Xxxx Xxx,
Xxxxx, Xxxx Xxxxxxxxx.
"THE RETENTION DATE" means the date which is seven (7) days
after the date of agreement or
determination of the Adjusted Net Assets
pursuant to the terms of this Agreement.
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"SECURITY INTEREST" means any mortgage, charge, assignment
or assignation by way of security,
guarantee, indemnity, debenture,
hypothecation, pledge, declaration of
trust, lien, right of set off or
combination of accounts, or other
interest in the nature of security
whatsoever, howsoever created or
arising.
"SPECIFIC DISCLOSED DOCUMENTS" means the Disclosed Documents which are
referred to in the text of the
Disclosure Letter other than solely by
operation of paragraphs 3.2, 3.3 or 3.5
of the Disclosure Letter.
"THE SHARES" means the "A" Shares, the "B" Shares and
the "C" Shares to be sold by the Vendors
in the numbers set out opposite their
respective names in column 2 of Schedule
1.
"SUBSIDIARY" means a subsidiary as defined in Section
736 CA 1985 (as supplemented by Section
736A CA 1985).
"TARGET EARNINGS" has the meaning provided in paragraph 4
of Schedule 3.
"TAXATION" has the meaning provided the Tax Deed
and "Tax" shall be construed
accordingly.
"TAXATION AUTHORITY" has the meaning provided in the Tax
Deed.
"TAX DEED" means the Deed in the form set out in
Schedule 5.
"TAXATION STATUTES" includes statutes (and all regulations
and arrangements whatsoever made
thereunder) whether of the United
Kingdom or elsewhere, enacted before the
date of this Agreement, providing for or
imposing any Taxation.
"TAXATION WARRANTIES" means the Warranties contained in
paragraph 3 of Schedule 4.
"TCGA" means the Taxation of Chargeable Gains
Xxx 0000.
"THE VENDORS' ACCOUNTANTS" means Coopers & Xxxxxxx of Xxxxxxxxxx
Xxxxx, 00 Xxxx Xxx, Xxxxxxxxxx, XX0 0XX.
"VENDORS' GROUP" means the Vendors, any holding company
of either of the Vendors and the
subsidiaries and subsidiary undertakings
(from time to time of such holding
companies, all of them and each of them
as the context admits), other than the
Group Companies.
"THE VENDORS' SOLICITORS" means Ashurst Xxxxxx Xxxxx of Xxxxxxxxx
Xxxxx, 0 Xxxxxxxxxx Xxxxxx Xxxxxx,
Xxxxxx, XX0X 0XX.
"THE WARRANTIES" means the warranties set out in Schedule
4.
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1.2 "UNDERTAKING", "SUBSIDIARY UNDERTAKING", "PARENT UNDERTAKING" and
"PARTICIPATING INTEREST" each bear the meanings ascribed to them in CA
1989.
1.3 References to any statute, or to any statutory provision, statutory
instrument, order or regulation made thereunder, includes that statute,
provision, instrument, order or regulation as amended, modified,
consolidated, re-enacted, or replaced from time to time, whether before
or after the date of this Agreement and also includes any previous
statute, statutory provision, instrument, order or regulation, amended,
modified, consolidated, or re-enacted by such statute, provision,
instrument, order or regulation.
1.4 All references to a statutory provision shall be construed as including
references to all statutory instruments or orders, regulations or other
subordinate legislation made pursuant to that statutory provision.
1.5 Unless the context otherwise requires, references to the singular
include the plural, references to any gender include all other genders,
and references to "persons" shall include individuals, bodies
corporate, unincorporated associations, professions, businesses and
partnerships.
1.6 Clause headings are for information only and shall not affect the
construction of this Agreement.
1.7 The Schedules to this Agreement shall for all purposes form part of
this Agreement.
1.8 Each agreement, undertaking, covenant, and warranty by the Vendors
shall be deemed for all purposes to be made or given jointly and
severally.
1.9 References to the "Agreed Form" mean in the form agreed in writing
between the Vendors' Solicitors and the Purchaser's Solicitors prior to
signature of this Agreement.
2. SALE AND PURCHASE
2.1 Subject to the terms and conditions of this Agreement, the Vendors
shall sell and the Purchaser shall purchase the Shares, together with
all accrued benefits and rights attaching or accruing to the Shares
(including all dividends declared) on or after the date of this
Agreement.
2.2 The Vendors jointly and severally covenant with the Purchaser as
follows:
2.2.1 that each of the Vendors has the right to sell and transfer
those Shares set out opposite its name in column 2 of Schedule
1 in accordance with the terms of this Agreement;
2.2.2 that the Shares are sold free from any liens, charges and
encumbrances (whether monetary or not and including any lien
which the Vendors might otherwise have, whenever arising, for
unpaid amounts of Consideration payable under this
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Agreement in respect of the Shares) and from all other rights
exercisable by third parties.
3. PRE-EMPTION RIGHTS WAIVER
The Vendors waive all rights of pre-emption (if any) over the Shares to
which they may be entitled under the Articles of Association of the Company, or
otherwise, in relation to the sale and purchase of the Shares pursuant to this
Agreement.
4. CONSIDERATION AND EXISTING GROUP LOAN STOCK
4.1 The Consideration for the Shares shall be determined and satisfied in
accordance with the provisions of Clause 4 and Schedule 3 of this
Agreement and shall be subject to adjustment in accordance with the
provisions of Clause 5 and Schedule 3 of this Agreement.
4.2 On Completion the Purchaser will pay, on account of the Consideration,
an amount equal to the Initial Consideration which will be satisfied:
4.2.1 as to the sum of (pound)17,400,000 (seventeen million, four
hundred thousand pounds), less the amount of the Retention, by
payment in cash by the Purchaser at Completion; and
4.2.2 as to the amount of the Retention, by payment in cash by the
Purchaser at Completion into the Retention Account.
4.3 The Vendors shall be entitled to the Initial Consideration in the
amounts set opposite their names in column 4 of Schedule 1, such
Initial Consideration to be apportioned pro rata between that part of
the Consideration payable pursuant to Clause 4.2.1 and the Retention,
and to the Further Consideration in the proportions set out in column 3
of Schedule 1.
4.4 The provisions of this Clause 4.4 shall apply to the Retention:
4.4.1 Subject to the provisions of Clause 4.4.2, in the event that
on the Retention Date the Adjusted Net Assets of the Group
Companies as agreed or determined pursuant to Clause 5 of this
Agreement shall be:
(a) equal to or greater than the Net Asset Threshold,
there shall be paid on the Retention Date to the
Vendors' Solicitors the Retention;
(b) less than the Net Asset Threshold, but the shortfall
is less than the Retention, the Purchaser shall be
entitled to be paid for its own use and benefit from
the Retention an amount equivalent to any such
shortfall below the Net Asset Threshold, and there
shall be paid on the Retention Date to the Vendors'
Solicitors any balance of the Retention; and
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(c) less than the Net Asset Threshold, but the shortfall
is more than the amount of the Retention, the
Purchaser shall be entitled to be paid for its own
use the entire amount of the Retention in part
satisfaction of the obligations of the Vendors under
Clause 6.2, but without prejudice to the obligations
of the Vendors to indemnify the Purchaser for any
further shortfall in the amount of the Net Asset
Threshold pursuant to Clause 6.2.
4.4.2 All payments of capital to be made pursuant to Clause 4.4.1
shall be made on the basis that a pro rata portion of all
interest earned on such amount in the Retention Account shall
also be made to the relevant payee. The Vendors and the
Purchaser shall instruct the Vendors' Solicitors and the
Purchaser's Solicitors to sign any withdrawal form or other
document to give effect to the terms of this Clause 4.4
4.5 On Completion the Vendors shall procure the transfer to the Purchaser
or a company nominated by the Purchaser, of the benefit of the Existing
Group Loan Stock in consideration for the payment of cash to Xxxxxxx
Xxxxx Limited in the sum of (pound)29,600,000 (twenty nine million six
hundred thousand pounds).
5. COMPLETION BALANCE SHEET
5.1 The Purchaser shall procure that within thirty (30) days after the date
of Completion, the Company and the Vendors' Accountants will prepare a
draft Completion Balance Sheet and a draft statement of the Adjusted
Net Assets of the Company and submit the same for approval to the
Vendors, the Purchaser and the Purchaser's Accountants.
5.2 The Completion Balance Sheet shall be prepared:
5.2.1 on the basis of the historical cost convention as modified by
the revaluation of certain fixed assets;
5.2.2 using the specific accounting policies specified in Schedule
10 and (subject to the provisions of Schedule 10) generally
accepted United Kingdom accounting principles (including all
relevant Statements of Standard Accounting Practice issued by
the Accounting Standards Committee, Financial Reporting
Standards issued by the Accounting Standards Board, and any
applicable pronouncements of the Urgent Issues Task Force of
the Accounting Standard Board); and
5.2.3 subject to the preceding provisions of this Clause 5.2, in a
manner consistent with the procedures and policies, bases and
methods of valuation adopted in the preparation of the Last
Accounts.
5.3 Within thirty (30) days of receipt by the Vendors, the Purchaser and
the Purchaser's Accountants of the draft Completion Balance Sheet, the
Purchaser and the Vendors will inform each other in writing whether or
not in their opinion the draft Completion Balance Sheet complies with
the requirements of this Clause 5 and whether they agree with the draft
statement of Adjusted Net Assets and, if not, shall specify in writing,
so far as they are then reasonably able so to do, the amount and nature
of any item which they do not
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accept. If both parties confirm in writing that they accept the draft
Completion Balance Sheet and the draft statement of Adjusted Net
Assets, or if both parties fail to inform the other party within thirty
(30) days of receipt of the draft Completion Balance Sheet whether or
not they accept that the draft Completion Balance Sheet complies with
the requirements of this Clause 5, such draft shall be the Completion
Balance Sheet, and the Adjusted Net Assets shall be determined by
reference to it.
5.4 If either the Purchaser or the Vendors informs the other party, in
accordance with Clause 5.3, that it does not accept that the draft
Completion Balance Sheet and the draft statement of Adjusted Net Assets
complies with the requirements of this Clause 5, the Purchaser and the
Vendors will hold discussions in good faith with a view to agreeing the
Completion Balance Sheet and the draft statement of Adjusted Net Assets
and the amount of the draft Adjusted Net Assets. If such agreement is
reached, and is confirmed in writing by the parties, it shall be final
and binding on the parties but without prejudice to the Purchaser's
right to claim under the Warranties, the Tax Deed, or otherwise in
respect of any matter under this Agreement.
5.5 Any dispute about the Completion Balance Sheet or the draft statement
of Adjusted Net Assets which remains unresolved sixty (60) days after
receipt by the Vendors, the Purchaser and the Purchaser's Accountants
of the draft Completion Balance Sheet shall (unless otherwise agreed in
writing by the parties prior to the expiry of such period) be
determined by an Expert.
5.6 In the event that no referral to an Expert is made, all costs incurred
by the Vendors in reviewing and agreeing the Completion Balance Sheet,
or the draft statement of Adjusted Net Assets, shall be borne by the
Vendors and all such costs incurred by the Purchaser shall be borne by
the Purchaser.
5.7 Each party will co-operate fully with the other and, if applicable,
with the Expert appointed under Clause 5.5 (including giving all
reasonable access to records, information, and to personnel) with a
view to enabling the draft Completion Balance Sheet and the draft
statement of Adjusted Net Assets to be prepared and subsequently
discussed and, if applicable, with a view to enabling any Expert to
make any determination required by Clause 5.5, and in particular the
Purchaser shall procure that the Group Companies shall permit the
Vendors and their advisers (and, if applicable, the Expert) to have
access to, and (where reasonable) to take copies of any records or
information belonging to the Company. The parties have procured a
physical stock take of the stock of the Company prior to Completion
which was attended by representatives of the Vendors and the Purchaser
and the Vendors' Accountants and the Purchaser's Accountants.
5.8 The Vendors shall keep confidential any such records or information
belonging to the Company and shall not make use of the same save for
the purposes of this Clause 5, and shall not disclose the same to any
other person firm or company (other than any Expert or any Taxation
Authority to the extent required) except to the extent that such person
firm or company needs to know such information for the purposes of this
Clause 5 and then
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only upon terms that such person firm or company is bound by the terms
of this Clause 5.8.
6. ADJUSTED NET ASSETS
6.1 It is hereby agreed between the Vendors and the Purchaser that if the
Adjusted Net Assets as shown by the Completion Balance Sheet as agreed
or determined pursuant to Clause 5 are less than the Net Asset
Threshold, then the Vendors shall be jointly and severally liable to
pay to the Purchaser (pound)1 (one pound) for every (pound)1 (one
pound) of such shortfall, together with, where such amount exceeds the
amount of the Retention, interest on the amount of such excess at the
rate of 2 per cent above the Base Rate of Lloyd's Bank plc from time to
time and, where such amount is equal to or less than the amount of the
Retention, interest at the rate payable in respect of the sum in the
Retention Account from time to time in each case from the Completion
Date to the date the amount of any such shortfall falls due for payment
under Clause 6.2, and any such payment shall be treated as a pro rata
reduction of the Initial Consideration.
6.2 The Vendors jointly and severally undertake to the Purchaser that if,
and to the extent that, their obligations under Clause 6.1 are not
satisfied by the release to the Purchaser of all or part of the
Retention pursuant to Clause 4.4, then the Vendors shall pay the amount
of the shortfall in Adjusted Net Assets referred to in Clause 6.1 (less
the amount of the Retention) to the Purchaser in cash within seven (7)
days after the Retention Date, and failing payment in full within such
period of seven (7) days the amount of such shortfall shall be
capitalised and aggregated with the interest accrued under Clause 6.1
(if any) and such total amount shall bear interest from the Retention
Date until the date of actual payment at the rate of four (4) per cent
per annum above the base rate of Lloyds Bank plc from time to time
calculated on a daily basis.
7. COMPLETION
7.1 Completion shall take place at the London offices of the Purchaser's
Solicitors immediately after the signing of this Agreement when the
events set out in Clauses 7.2 to 7.7 shall occur.
7.2 At Completion the Vendors shall deliver to the Purchaser's Solicitors:
7.2.1 duly completed and executed transfers of the Shares in favour
of the Purchaser or as it directs together with a power of
attorney from each Vendor in the agreed form enabling the
Purchaser to vote the Shares pending its registration as
shareholder;
7.2.2 the certificates for the Shares;
7.2.3 duly completed and signed transfers in favour of the Purchaser
(or as it may direct) of all shares of the Group Companies
(other than the Company) not registered in the name of the
Company and/or any other Group Company together with the
relative share certificates;
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7.2.4 the Tax Deed duly executed by the Vendors;
7.2.5 the resignations of each of the directors and the secretary of
each Group Company from their respective offices in each Group
Company, with a written acknowledgement under seal expressed
to be subject to English Law from each of them in such form as
the Purchaser requires that he has no claim against any Group
Company on any grounds whatsoever in respect of their
positions as directors and secretary;
7.2.6 a letter in the Agreed Form from the existing auditors of the
Company confirming that had they resigned at Completion they
would have had no outstanding claims of any kind against the
Company and confirming that had they so resigned there would
have been no circumstances connected with their ceasing to
hold office which they consider should be brought to the
attention of the members or creditors of the Company;
7.2.7 evidence satisfactory to the Purchaser that all charges,
debentures and other Security Interests and all guarantees
affecting each Group Company (including without limitation
Security Interests in favour of 3i plc) have been discharged
in full; and
7.2.8 a letter of release in Agreed Form duly executed by Hero and
Xxxxxxx Xxxxx Limited for itself and as duly authorised agent
for each of its Associates confirming that with effect from
Completion no sums are owed by any Group Company to Hero or
any of its Associates on any account whatsoever except in
relation to monies owing to the Vendors or any of their
Associates in relation to inter company trading in the
ordinary course of business.
7.3 At Completion the following items in Clauses 7.3.1 to 7.3.8 and 7.3.10
shall be delivered or made available to the Purchaser by the Vendors,
and the Purchaser shall procure the delivery of the items in 7.3.9 and
7.3.11:
7.3.1 the Certificate of Incorporation (and, where relevant, on
Change of Name) of each Group Company (other than copies of
the Certificate of Incorporation of the Company in respect of
which constructive delivery shall be given);
7.3.2 the minute books of each Group Company duly made up to
Completion;
7.3.3 the register of members and other statutory registers of each
Group Company duly made up to Completion;
7.3.4 the common seal of the Company and constructive delivery shall
be given of the common seals of all other Group Companies;
7.3.5 all unissued share certificates of each Group Company;
7.3.6 the title deeds relating to each of the Properties together
with the statutory declaration in relation to the property at
Sawley;
14
7.3.7 constructive delivery of all books, accounts and documents of
record and all other documents in the possession or control of
any of the Vendors in connection with each Group Company all
complete and up to date;
7.3.8 all bank statements of all bank accounts of each Group Company
as at a date not more than three Business Days prior to
Completion;
7.3.9 new bank mandates to be given by each Group Company;
7.3.10 constructive delivery of all the current cheque books, paying
in books and unused cheques of each Group Company; and
7.3.11 a written special resolution of the Company in the Agreed Form
(i) effecting changes to its memorandum of association so as
to confer, inter alia, an express power to give financial
assistance (ii) approving certain transactions for the purpose
of Chapter VI CA 1985 and (iii) changing the name of the
Company to exclude reference to the word "Hero".
7.4 At Completion the Vendors shall and shall procure that their respective
Associates shall pay all monies then owing by them to each Group
Company, including, for the avoidance of doubt, all management charges
(save for monies owing in relation to inter company trading in the
ordinary course of business) whether due for payment or not and that
all guarantees, indemnities or other obligation given by each Group
Company for or on behalf of the Vendors or their Associates are
cancelled without liability on the part of each Group Company.
7.5 On Completion the Vendors and the Purchaser shall procure that the
Intellectual Property Licence is entered into.
7.6 At Completion the Vendors shall deliver to the Purchaser a duly
executed instrument of transfer of the Existing Group Loan Stock
together with the relevant stock certificate.
7.7 At Completion a Board Meeting of each Group Company shall be duly
convened and held at which, with effect from Completion:
7.7.1 the transfers referred to in Clauses 7.2.1 and 7.2.3 (as the
case may be) shall (subject to stamping) be registered;
7.7.2 such persons as the Purchaser may nominate shall be appointed
as additional directors and as the secretary of each Group
Company and the resignations referred to in Clause 7.2.5 shall
be submitted and accepted;
7.7.3 all authorities to the bankers of each Group Company relating
to bank accounts shall be revoked and new authorities to such
persons as the Purchaser may nominate shall be given to
operate the same; and
7.7.4 the registered offices of each Group Company shall be changed
to such address as the Purchaser shall stipulate.
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7.8 Upon completion of the matters specified in Clauses 7.2 to 7.7:
7.8.1 the Purchaser will by telegraphic transfer (1) pay the sum
referred to in Clause 4.5 to Xxxxxxx Xxxxx Limited and (ii)
pay the sum referred to in Clause 4.2.1 and the sum of
(pound)9013.70 to the Vendors' Solicitors (whose receipt shall
be an absolute discharge to the Purchaser); and
7.8.2 the Purchaser will pay the amount of the Retention by
telegraphic transfer into the Retention Account.
7.9 The Purchaser may in its absolute discretion waive any requirement
contained in Clauses 7.2 to 7.7 inclusive but shall not be obliged to
complete the purchase of any of the Shares unless the purchase of all
the Shares is completed in accordance with such Clauses and this
Agreement.
8. WARRANTIES
8.1 The Vendors to the extent and subject as set out in this Clause 8,
warrant to the Purchaser that the Warranties are, and at Completion
will be, true and accurate in all respects.
8.2 Each of the Warranties (other than those referred to in paragraph 1 of
Schedule 7 in respect of which no qualification is accepted except as
expressly set out therein) is given subject to the matters fairly
disclosed in the Disclosure Letter or the Disclosed Documents but none
of the Warranties is otherwise subject to any qualification whatever
other than as expressly set out in Schedule 7. No letter, document or
other communication shall be deemed to constitute a disclosure for the
purposes of the Warranties unless the contents of the same are fairly
disclosed in the Disclosure Letter or the Disclosed Documents.
8.3 Each Warranty in respect of "the Company" shall be deemed to be a
Warranty of the Vendors given in respect of the Company and each other
Group Company and (unless the context or subject matter otherwise
requires) the expression "the Company" in Schedule 4 shall be construed
accordingly.
8.4 Save in respect of matters related to the Environment or Environmental
Law, in relation to which only Warranty 8.3 shall apply, each of the
Warranties is without prejudice to any other Warranty and, except where
expressly stated, no Clause contained in this Agreement governs or
limits the extent or application of any other Clause and the Warranties
shall not in any respect be extinguished or affected by Completion.
8.5 Save as expressly provided in Schedule 7, the rights and remedies of
the Purchaser in respect of any breach of the Warranties shall not be
affected by completion of the purchase of the Shares, by any
investigation made by or on behalf of the Purchaser into the affairs of
any Group Company, by any failure to exercise or delay in exercising
any right or remedy, or by any other event or matter whatsoever, except
in circumstances where a specific written waiver has been duly signed
by the Purchaser relating to such breach.
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8.6 None of the information supplied by or on behalf of any Group Company
or of its professional advisers prior to the date of this Agreement to
any of the Vendors or their directors, employees, agents,
representatives or advisers in connection with the Warranties or the
contents of the Disclosure Letter, or otherwise in relation to the
business or affairs of any Group Company, shall be deemed a
representation, warranty or guarantee of its accuracy by the relevant
Group Company to the Vendors and shall not constitute a defence to any
claim by the Purchaser under the Warranties or under the Tax Deed, and
the Vendors waive any and all claims which they might otherwise have
against any Group Company and their respective officers employees and
advisers.
8.7 Notwithstanding any rule of law or equity to the contrary, any release,
waiver or compromise or any other arrangement of any kind whatsoever to
which the Purchaser may agree or effect in relation to one of the
Vendors in connection with this Agreement or the Tax Deed, and in
particular, but without limitation, in connection with any of the
Warranties, shall not affect the rights and remedies of the Purchaser
as regards any other of the Vendors.
8.8 Each of the Vendors undertakes, in relation to any Warranty which
refers to the knowledge, information, belief or awareness of a Vendor
or any similar expression, that such Vendor has made, due and careful
enquiry into the subject matter of that Warranty (including where
applicable, of Xxxxx Xxxx, Xxxxxx Xxxxxxxxxxx, Xxxxxx Xxxx, Xxxxxxx
Xxxxxx, Xxxx Xxxx or Xxxx Xxxxxxx but not otherwise of any officers or
employees of the Company) and each of them acknowledges that the
knowledge, information, belief or awareness of one of the Vendors shall
be attributable to the others of them.
8.9 The provisions of Schedule 7 shall have effect to limit the liability
of the Vendors under the Warranties.
8.10 The Purchaser acknowledges that the Vendors have entered into this
Agreement in reliance upon the warranties contained in Schedule 12 Part
1 to the extent that the Further Consideration is in part dependent
upon the financial performance of New Cott and accordingly, warrants to
each of the Vendors individually in the terms of Schedule 12 Part 1
("the Purchaser's Warranties").
8.11 Each of the Purchaser's Warranties is without prejudice to any of the
other warranties in such Schedule and the Purchaser's Warranties shall
not in any respect be extinguished or affected by Completion.
8.12 Subject to the provisions of Schedule 12 Part II, the rights and
remedies of the Vendors in respect of any breach of the Purchaser's
Warranties shall not be affected by any failure to exercise or delay in
exercising any right or remedy.
9. RESTRICTIONS ON THE VENDORS
9.1 In this Clause:
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"BUSINESS" means all and any trades or other commercial
activities of the Company which as at the
Completion Date the Company shall carry on
with a view to profit or which the Company
shall as at the Completion Date have
determined to carry on with a view to profit
in the immediate or foreseeable future;
"CONFIDENTIAL BUSINESS
INFORMATION" means all or any information relating to:
(i) the business methods, corporate
plans, management systems,
finances, new business
opportunities or development
projects of the Company;
(ii) the marketing or sales of any past
or present or future product or
service of the Company; or
any trade secrets or other information
relating to the provision of any product or
service of the Company to which the Company
attaches confidentiality or in respect of
which it holds an obligation of
confidentiality to any third party;
"CUSTOMER" means any person who or which shall at the
date of Completion be in negotiation with
the Company for the provision of Restricted
Services or to whom the Company has provided
Restricted Services during the period of two
(2) years prior to the date of Completion;
"MATERIAL INTEREST" means:
(i) the holding of any position as
director, officer, employee,
consultant, partner, principal or
agent;
(ii) the direct or indirect control or
ownership (whether jointly or
alone) of any shares or debentures
or any voting rights attached to
them; or
the direct or indirect provision of any
financial assistance or support.
"PURCHASER'S GROUP" means the Purchaser and each of its
Subsidiaries;
"RESTRICTED AREA" means England, Wales, Scotland, Northern
Ireland, the Republic of Ireland, the
Channel Isles and the Isle of
18
Man;
"RESTRICTED SERVICES" means the manufacture and/or distribution of
carbonated soft drinks; alcoholic soft
drinks and bottled or packaged flavoured
water; the operation of vending machines and
products for injection and blow moulding
equipment, and the manufacture and/or sale
of plastic moulded parts and containers;
and covenants given in respect of "the Company" shall be deemed to be
given separately in respect of the Company and each other Group Company
and (unless the context or subject matter otherwise requires) the
expression "the Company" in this Clause 9 shall be construed
accordingly.
9.2 Each of the Vendors hereby covenants with the Purchaser that without
the prior written consent of the Purchaser:
9.2.1 it will not for a period of five (5) years after the date of
Completion hold any Material Interest in any business (other
than the Purchaser or the Company or any company which may
acquire the Purchaser or the Company) which provides
Restricted Services in competition with the Business in the
Restricted Area;
9.2.2 it will not for a period of five (5) years after the date of
Completion hold any Material Interest in any person, firm or
company carrying on business in the Restricted Area which
requires or might reasonably be expected by the Company or,
following the Reorganisation, the Purchaser; to require it to
disclose or make use of any Confidential Business Information
in order properly to discharge its duties or to further the
interest of such person, firm or company;
9.2.3 it will not at any time after the date of Completion disclose
or permit there to be disclosed (save as authorised by the
Purchaser or required by law), any Confidential Business
Information, nor will it at any time after Completion
otherwise make use of any Confidential Business Information
for its own benefit, or for the benefit of others, or in any
way to the detriment of the Company or, following the
Reorganisation, the Purchaser;
9.2.4 it will not for a period of two (2) years after Completion
solicit or entice away or seek to entice away any person who
is, and was immediately prior to the date of Completion,
employed by the Company in a senior capacity provided that
this Clause 9.2.4 shall not apply to persons who leave the
employment of the Company of their own volition, no such
solicitation or enticement having taken place;
9.2.5 it will not for a period of five (5) years after the date of
Completion within the Restricted Area and in respect of
Restricted Services directly or indirectly:
(a) solicit the custom of, or orders from; or
19
(b) accept orders from;
any person who at any time during the two (2) years
immediately preceding Completion was a client or customer of
the Company in respect of Restricted Services;
9.2.6 it will not for a period of five (5) years after the date of
Completion interfere with or seek to interfere with the
continuance of supplies to the Company (or the terms relating
to such supplies) from any suppliers who have been supplying
components, materials or services to the Company at any time
during the two (2) years immediately preceding Completion; or
9.2.7 if it shall have obtained trade secrets or other confidential
information belonging to any third party under an agreement
which contained restrictions on disclosure, it will not at any
time infringe such restrictions.
9.3 Nothing in Clause 9.2 shall prevent the Vendors or any of their
Subsidiaries from carrying on anywhere in the world any business (other
than any business which provides Restricted Services in competition
with the Business in the Restricted Area) carried on by them (i) at the
date of Completion or (ii) or at any time during the period of one year
prior to Completion.
9.4 Subject to the terms of Clause 9.5, there shall not be a breach of
Clause 9.2, if either of the Vendors or their Subsidiaries acquires the
whole or any part of the share capital or business of a company or
group of companies (the "Acquired Business") which carries on the
Restricted Services in the Restricted Area if the Restricted Services
in the Restricted Area comprise less than ten (10) per cent of the
turnover of the Acquired Business at the date of completion of such
acquisition but in such event the Vendors shall:
9.4.1 use all reasonable endeavours to dispose of that part of the
Acquired Business which so competes within six months of the
date of completion of such acquisition to an unconnected third
party; and
9.4.2 shall in any event complete any such disposal within twelve
months of the date of such acquisition to an unconnected third
party.
9.5 Notwithstanding the terms of Clause 9.4, the Vendors or their
Subsidiaries shall be at liberty to acquire an Acquired Business on or
after the fourth anniversary of Completion which carries on the
Restricted Services in the Restricted Area where the Restricted
Services in the Restricted Area comprise less than ten (10) per cent of
the turnover of the Acquired Business at the date of completion of such
acquisition in which event the provisions of Clause 9.4 shall not
apply.
9.6 The parties agree that the restrictions contained in Clause 9.2.3 shall
not apply if and to the extent that the Confidential Business
Information concerned has ceased to be confidential or come into the
public domain (other than as a result of breach of any obligation of
confidence under this Agreement by the Vendors), nor if the Vendors are
20
required to disclose the Confidential Business Information by any
applicable law, government order, regulation or court.
9.7 Each Vendor shall procure that all companies and businesses directly or
indirectly owned or controlled by such Vendor shall be bound by and
observe the provisions of this Clause as if they were parties
covenanting with the Purchaser.
9.8 Each Vendor acknowledges that the Purchaser is accepting the benefit of
the covenants contained in this Clause both on its own behalf and on
behalf of its Subsidiaries with the intention that the Purchaser may
claim against any or all of the Vendors on behalf of any such
Subsidiary for loss sustained by that Subsidiary as a result of any
breach of the covenants contained in this Clause.
9.9 Nothing in this Clause 9 shall preclude any Vendor from being the owner
for investment purposes only of not more than three (3) per cent of the
equity share capital of any company listed on the Official Lists of the
London Stock Exchange or the Irish Stock Exchange or the Alternative
Investment Market of the London Stock Exchange or the Developing
Companies Market of the Irish Stock Exchange.
9.10 The restrictions contained in this Clause 9 are considered reasonable
by the Vendors in all respects but if any of those restrictions shall
be held to be void in the circumstances where it would be valid if some
part were deleted the parties agree that such restrictions shall apply
with such deletion as may be necessary to make it valid and effective.
9.11 The provisions of Clauses 9.2.1 to 9.2.7 (inclusive) are separate and
severable and shall be enforceable accordingly.
9.12 The parties acknowledge that pursuant to the Reorganisation the
business, assets and liabilities of the Company will be transferred to
the Purchaser immediately after Completion and the Vendors acknowledge
that such transfer shall not operate to, nor shall be construed so as
to prejudice the enforceability of the provisions of this Clause 9.
10. POST COMPLETION PROVISIONS
With effect from Completion, and save as otherwise agreed or provided
in this Agreement, all arrangements made by the Vendors or any of their
Associates relating to the provision of management, administration, computer
services, insurance, personnel, purchasing, accounting, legal or similar
services in relation to each Group Company (in so far as they have been provided
to date) shall cease without further liability on the part of any party (save to
the extent that any accrued liabilities are provided for in the Completion
Balance Sheet) but without prejudice to any rights of the Purchaser under the
Warranties or the Tax Deed.
11. POST COMPLETION UNDERTAKINGS
11.1 For the purposes of this Clause 11, the expression the "RESTRICTED
PERIOD" shall mean (i) the period commencing on the Completion Date and
ending on 31 January 2003 or (ii)
21
the date upon which the obligations of the Purchaser in relation to
payment of the Further Consideration are satisfied in full (whichever
is the earlier).
11.2 The Parent acknowledges the interest of the Vendors in New Cott earning
the profits which it is fairly able to do, calculated in accordance
with the terms of Schedule 3 during the Restricted Period; and
undertakes by exercise of its rights by virtue of its shareholding in,
and by means of any representation on the board of directors of, the
Purchaser and any other member of the Purchaser's Group to procure (so
far as it is properly able to procure) that during the Restricted
Period:
11.2.1 each member of New Cott will act in the best interests of
their respective shareholders and will take all reasonable and
appropriate steps (consistent with the proper and prudent
management and operation of the business affairs of each
member of New Cott) to maintain and develop their respective
businesses and to further the reputation and commercial
interests of each member of New Cott;
11.2.2 None of the members of New Cott shall, during the Restricted
Period, enter into any scheme, transaction, agreement or
arrangement (i) which has no proper commercial purpose and
which might reasonably be regarded as designed to prejudice,
manipulate or otherwise adversely affect the Vendors'
entitlement to any Further Consideration or (ii) which might
reasonably be regarded as (aa) calculated materially to damage
the reputation or best commercial interests of New Cott taken
as a whole and (bb) likely to adversely affect the payment of
the Further Consideration.
11.2.3 There shall be no disposal by any direct or indirect holding
company of the Purchaser of all or a controlling interest in
(i) the share capital of any member of New Cott (a "Share
Sale") (but excluding for these purposes any disposal of any
share capital or any interest in any share capital in the
Parent) or (ii) the business or all or substantially all of
the assets of any member of New Cott (whether by a single
transaction or a series of connected transactions) (an "Asset
Sale") unless:
(a) any such disposal is to another member of the
Purchaser's Group in which event the Parent shall
remain liable for the performance of its obligations
under this Clause 11; or
(b) in the case of any proposed disposal to any person,
firm or company other than a member of the
Purchaser's Group (a "Third Party Disposal") the
Parent has satisfied itself (after due and careful
enquiry and mindful of the Vendors' interest in the
Further Consideration) that the ultimate holding
company (if any) of such acquirer, or the acquirer
(as the case may be) might reasonably be considered
to be capable of meeting the obligations to be
assumed by it pursuant to Clause 11.2.3(c) or
11.2.3(d) (as the case may require):
(c) in the case of a Third Party Disposal, if such
disposal is a Share Sale, on completion of such Share
Sale the parties hereto and thereto shall enter
22
into a deed of novation pursuant to which (aa) the
ultimate holding company of such acquirer or the
acquirer, as the case may be, shall covenant to
perform the obligations on the part of the Parent
contained in Clauses 11.1 to 11.2.4 inclusive,
mutatis mutandis, (but not otherwise) and (bb) the
Parent shall with effect from the date of such deed
of novation be released from any obligation under
this Agreement (but not in respect of any antecedent
breach which may have arisen prior to the date of
such deed of novation); or
(d) in the case of a Third Party Disposal, if such
disposal is an Asset Sale, upon Completion of such
Asset Sale involving the assumption by the acquiring
party under the relevant Asset Sale agreement of the
obligations of the Purchaser in respect of the
Further Consideration, the parties hereto and thereto
shall enter into a deed of novation pursuant to which
(aa) the ultimate holding company of such acquirer or
the acquirer, as the case may be, shall covenant (i)
to perform the obligations on the part of the Parent
contained in Clauses 11.1 to 11.2.4 inclusive,
mutatis mutandis, (but not otherwise) and (ii) to
perform all the obligations on the part of the
Purchaser in relation to the Further Consideration
and in particular the terms of Schedule 3 and (bb)
the Parent shall with effect from the date of such
deed of novation be released from any obligation
under this Agreement (but not in respect of any
antecedent breach which may have arisen prior to the
date of such deed of novation).
11.2.4 Save where advice is received from a licensed insolvency
practitioner that the directors of a member of New Cott are
under a duty to cease trading, no petition for the winding up
of any member of New Cott shall be presented by any such
member, nor shall any resolution for the voluntary winding up
of any member of New Cott be proposed, nor shall any member of
New Cott request or procure the appointment of any receiver or
administrative receiver over the whole or any part of the
assets or undertaking of any member of New Cott Provided that
no such consent shall be required for any such winding up as
part of a solvent amalgamation or reconstruction of any member
of New Cott involving the transfer of all or substantially all
the assets of New Cott to another member of the Purchaser's
Group together with the assumption of the obligations of the
Purchaser in relation to the Further Consideration.
11.2.5 For as long as the relevant member of New Cott remains a
member of the Purchaser's Group, all transactions between that
member of New Cott and any other member of the Purchaser's
Group shall be carried out on an arms length basis and on
usual commercial terms and in particular (but without
limitation) no management charge or other similar charge or
expense shall be charged to that member of New Cott by any
other member of the Purchaser's Group save for arm's length
charges representing fair and proper value for goods or
services actually provided or supplied by a member of the
Purchaser's Group to the member of New Cott provided that
nothing in this Clause 11.2.5 shall require any member of New
Cott to purchase concentrates from BCB Beverages Limited or
23
any other member of the Purchaser's Group on terms which are
substantially different from the terms which from time to time
exist in relation to such purchase arrangements between
members of the Purchaser's Group, the parties hereto
acknowledging that concentrate is an unusual product for which
market comparisons are difficult to obtain.
11.3 In the event that a member of New Cott shall, in the course of carrying
on its business, require goods or services of a type or kind which any
member of the Purchaser's Group is able to supply or provide, then the
Parent shall at the request of such member of New Cott and for so long
as the relevant member of New Cott remains a member of the Purchaser's
Group, use its reasonable endeavours to procure that such goods or
services are supplied to such member of New Cott on terms and
conditions which are not materially different from those offered by the
relevant member of the Purchaser's Group to any of its customers who
may contract for the same on a comparable basis provided that nothing
in this Clause 11.3 shall require the Parent to procure that such
member of New Cott purchases concentrates from BCB Beverages Limited or
any other member of the Purchaser's Group on terms which are
substantially different from the terms which exist from time to time in
relation to such arrangements, the parties hereto acknowledging that
concentrate is an unusual product for which market comparisons are
difficult to obtain.
11.4 In the event that any member of New Cott shall, in the course of
carrying on its business, require goods or services of a type or kind
which is the same as or similar to goods or services which are at the
relevant time supplied or provided to any member of the Purchaser's
Group by any third party (other than a member of the Purchaser's
Group), then the Parent for so long as the relevant member of New Cott
remains a member of the Purchaser's Group, shall at the request of such
member of New Cott use its reasonable endeavours to procure that such
goods or services are supplied or provided to such member of New Cott
on terms which are not materially different taken as whole from those
on which such goods or services are supplied or provided to the
relevant member of the Purchaser's Group.
11.5 In the event that any member of the Purchaser's Group shall, in the
course of carrying on its business, require goods or services of a type
or kind which any member of New Cott is able to supply or provide, then
the Parent for so long as the relevant member of New Cott remains a
member of the Purchaser's Group, shall use reasonable endeavours to
procure that such member shall obtain such goods or services from such
member of New Cott provided always that such member of New Cott is able
to supply or provide such goods or services on terms which, taken as a
whole, are not materially different from those on which such goods or
services can be obtained by such member from a third party.
11.6 The Purchaser shall use its reasonable endeavours to procure that:
11.6.1 there is prepared and delivered to each of the Vendors within
45 days of the end of each quarter, management accounts for
that quarter;
24
11.6.2 there is delivered to each of the Vendors within three months
after the end of each financial period of New Cott, audited
financial statements of New Cott for the financial period then
ended;
11.6.3 the Vendors are given such financial and other information and
documentation as they may reasonably and properly request in
order to enable the Vendors to monitor the performance of New
Cott.
11.7 Save as required by law or by the requirement of any recognised Stock
Exchange or to the extent that the same comes into the public domain
(other than through any act or omission of the Vendors or either of
them) each of the Vendors shall keep confidential all such information
as is supplied to it pursuant to Clause 11.6 and Schedule 3, shall not
make use of the same save for the purpose of monitoring the performance
of New Cott and in relation to the agreement or determination of the
Further Consideration pursuant to Schedule 3, and shall not disclose
the same to any other person, firm or company (including any
professional adviser) except to the extent that such person, firm or
company requires such information for the purposes set out in this
Clause 11.7 and in such case only upon terms that such person, firm or
company is bound by the terms of this Clause 11.7.
11.8 The parties agree that:
11.8.1 the provisions of this Clause 11 shall not apply to the
Reorganisation;
11.8.2 nothing in this Clause 11 shall prevent the Purchaser from
disposing of such of the business, assets and undertaking of
the Company as relate to the operation of the Company's
business from the premises at Sawley free from any obligation
under this Clause 11, but without prejudice to the provisions
of paragraph 4(c) of Schedule 3.
11.9 For the avoidance of doubt, nothing in this Agreement shall impose upon
the Parent or any person to whom any obligations of the Parent are
novated pursuant to this Clause 11, any obligation to provide any
financial support (whether by way of guarantee, financial accommodation
or investment) to any member of New Cott or otherwise.
11.10 Notwithstanding any other provision of this Agreement, the Purchaser
shall be at liberty at any time during the Restricted Period to
terminate any obligation in relation to the Further Consideration by
payment to the Vendors of a sum representing the maximum amount of the
Further Consideration which may become payable pursuant to Schedule 3
namely (pound)20,500,000 (twenty million five hundred thousand pounds)
together with any additional sums due under paragraph 10 of Schedule 3
(less all payments of Further Consideration made up to the date of such
payment) appropriately discounted for accelerated receipt and the
amount of such discount shall be agreed or determined in the
Appropriate Manner. Any such payment shall be made in full and final
satisfaction of any obligation of the Purchaser under this Agreement in
relation to the Further Consideration, and the Purchaser's Warranties
and the provisions of Clause 11 (other than this Clause 11.10) shall
cease to have effect.
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11.11 Any breach of the terms of Clauses 11.2 to 11.5 of this Clause 11 shall
be compensated for by means of an appropriate adjustment under
paragraph 5.2(e) of Schedule 3.
12. SPECIFIC INDEMNITIES
12.1 The Vendors jointly and severally undertake to indemnify and keep
indemnified the Purchaser and each Group Company from and against all
losses, liabilities, reasonable costs, claims and expenses suffered or
incurred by the Purchaser and/or any Group Company and arising directly
from any of the matters described in Schedule 8 less any amount
relating thereto which is provided for in the Completion Balance Sheet
("Claims").
12.2 In the event that a Claim is made, the Purchaser shall:
(a) as soon as reasonably possible and in any event
within 60 days of facts coming to the knowledge of
the Purchaser or the relevant Group Company which
might reasonably be regarded as confirming that
liability will arise in relation to the relevant
Group Company or the Purchaser give written notice
thereof to the Vendors together with such details of
the subject matter of the Claim as is then in the
possession of the Purchaser or the relevant Group
Company and shall thereafter as soon as reasonably
possible provide to the Vendors such further
information relating to the Claim as from time to
time comes to its attention;
(b) not make any admission of liability to, or agreement
or compromise with a person or persons in relation to
such Claim without the prior written consent of the
Vendors such consent not to be unreasonably withheld
or delayed; and
(c) if the Vendors shall indemnify and secure the
Purchaser's Group to its reasonable satisfaction
against all Claims, take such action as the Vendors
may reasonably request to avoid, dispute, defend,
appeal, compromise or settle such Claims.
12.3 For the avoidance of doubt:
12.3.1 save as provided in Clause 12.3.2 below, none of the
provisions of this Agreement which limit the liability of the
Vendors (other than paragraph 2.6 of Schedule 7) shall operate
to limit the liability of the Vendors under the terms of
Clause 12.1;
12.3.2 any failure by the Purchaser to comply with the provisions of
Clause 12.2 shall only release the Vendors from any
obligations under Clause 12.1 if and to the extent that such
failure has given rise to a liability to make a payment or has
increased the amount of any payment under Clause 12.1 which,
but for such failure, would otherwise have been avoided or
mitigated; and
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12.3.3 nothing in this Clause 12 shall oblige the Purchaser or the
Company to provide to the Vendors any paper, letter, record
note or document which is subject to legal privilege;
12.4 Any sum due to be paid under Clause 12 shall be paid within 7 (seven)
days of settlement of a claim or its final determination by a court of
competent jurisdiction and failing payment within such period the sum
outstanding shall bear interest at the rate which represents 4 (four)
per cent above the Base Rate of Lloyds Bank plc from the date of such
settlement or final determination.
13. GENERAL
13.1 Subject to Clause 13.2, this Agreement shall be binding upon and enure
for the benefit of the successors in title of the parties but shall not
be assignable by any party or its successors without the written
consent of the other save that the Purchaser may without such consent
assign all or any part of the benefit of this Agreement and of the Tax
Deed to any other member of the Purchaser's Group provided that in the
event that any such assignee ceases to be a member of the Purchaser's
Group the Purchaser shall procure that any benefits so assigned shall
be re-assigned back to the Purchaser forthwith.
13.2 Notwithstanding any other provisions in this Agreement or any of the
other agreements entered into by the Vendors and the Purchaser under or
in connection with this Agreement (all together the "Acquisition
Agreements") the Purchaser:
(a) may grant security over or assign by way of security
all or any of its rights under any of the Acquisition
Agreements (the "Rights") for the purposes of or in
connection with the financing (whether in whole or in
part) by the Purchaser of:
(i) the acquisition contemplated by this
Agreement; or
(ii) any of its, or its Subsidiaries' working
capital or other requirements; and
(b) its liquidator or administrator, or any receiver or
other person or entity appointed to enforce of such
security may enter into any other assignments or
transfers of any of the Rights.
13.3 The Vendors shall execute and perform all such further acts, deeds or
assurances as may be required for effectively vesting the Shares in the
Purchaser. Each of the Vendors shall following Completion provide such
information as to each Group Company, its business and its affairs as
the Purchaser shall reasonably and by prior notice specify save that
nothing in this Clause shall operate to enable the Purchaser to obtain
access to any documents or information to which the Purchaser or the
relevant Group Company would not otherwise be entitled to at law that
would prejudice the defence by the Vendors of any
27
claims made by the Purchaser under the Warranties, the Tax Deed or the
indemnities set out in Clause 12.
13.4 Any sums due to the Vendors pursuant to this Agreement may be paid to
the Vendors' Solicitors, by way of transfer into the client account of
the Vendors' Solicitors, whose receipt shall constitute a full
discharge of the Purchaser's obligations to make such payment and the
Purchaser shall not be concerned with the application of any such
amount between the Vendors.
13.5 The provisions of this Agreement insofar as the same shall not have
been performed at Completion shall remain in full force and effect
notwithstanding Completion.
13.6 No delay or omission by the Purchaser in exercising any right, power or
remedy shall operate as a waiver thereof, and any single or partial
exercise thereof shall not preclude any other or further exercise
thereof or the exercise of any right, power or other remedy. The rights
and remedies of the Purchaser hereunder are cumulative and not
exclusive of any right or remedy provided by law.
13.7 No party shall disclose the making of this Agreement nor its terms nor
any other agreement referred to in this Agreement (except those matters
set out in the press release in the Agreed Form) and each of the
Vendors and the Purchaser shall procure that no member of the Vendor's
Group or the Purchaser's Group respectively shall make any such
disclosure without the prior consent of the other party unless
disclosure is:
(a) to any Taxation Authority;
(b) to its professional advisors, financiers or bankers;
(c) to any director, officer or other employee of any
member of the Vendor's Group or the Purchaser's Group
to the extent that it is necessary to make such
disclosure for the proper performance of their
duties;
(d) required by law or by the rules of the Toronto Stock
Exchange, the Montreal Exchange, NASDAQ, the Basle
Stock Exchange, the Zurich Stock Exchange, the
Securities Commission of Canada or any other
regulatory body;
Provided that this Clause 13.7 does not apply to
announcements, communications or circulars made or sent by the
Purchaser or by any Group Company after Completion to
customers, clients or suppliers of any Group Company to the
extent that it informs them of the Purchaser's acquisition of
the Group Companies or to any announcements containing only
information which has become generally available.
13.8 No provision of this Agreement or of any agreement or arrangement of
which this Agreement forms part, by virtue of which this Agreement or
the agreement or arrangement of which it forms part is subject to
registration under the Restrictive Trade Practices Act 1976 shall take
effect until the day after the day on which particulars of this
28
Agreement, or the agreement or arrangement of which it forms part, (as
the case may be) have been furnished to the Director General of Fair
Trading pursuant to Section 24 of the said Act.
13.9 All expenses incurred by or on behalf of the parties, including all
fees of agents, representatives, solicitors, accountants and actuaries
employed by any of them in connection with the negotiation, preparation
or execution of this Agreement shall be borne solely by the party who
incurred the liability and there shall be no liability in respect of
them upon any Group Company.
14. RIGHTS OF SET-OFF
14.1 In the event that prior to the expiry of (i) the sixth anniversary of
Completion in the case of the Tax Deed or the Tax Warranties or (ii)
the second anniversary of Completion in the case of the Warranties
(other than the Tax Warranties) ("the Set-Off Expiry Date") the
Purchaser shall have given notice to the Vendors of a Claim or Claims
under the Warranties, and/or the Tax Deed then the following provisions
shall at the sole option of the Purchaser apply:
(a) to the extent that any such Claim or Claims shall
have been settled (in accordance with Clause 14.2)
but shall not have been paid by or on behalf of the
Vendors prior to the Set-Off Expiry Date, the
Purchaser shall be entitled (but not obliged) to
treat its obligations hereunder to satisfy the
Further Consideration (if and to the extent not then
already satisfied) as being reduced pro tanto by the
amount to the extent settled of such Claim or Claims;
(b) to the extent that any such Claim or Claims shall not
have been settled then on receipt by the Purchaser
prior to the Set-Off Expiry Date of an opinion of a
Queen's Counsel (instructed in accordance with Clause
14.4) to the effect that, on the balance of
probabilities, the Purchaser will recover in respect
of such Claim or Claims, and that the amount of any
such Claim or Claims is a reasonable estimate of the
amount which will be payable by the Vendors, the
Purchaser shall be entitled to set-off the amount
claimed by the Purchaser thereto against the Further
Consideration, provided that such amount is placed on
deposit in the joint names of the Purchaser and the
Vendors on the date on which, but for the exercise of
such right of set off, such amount would otherwise
have fallen due for payment to the Vendors, pending
settlement of the Claim. Following settlement of the
Claim if the amount upon deposit exceeds the amount
of the settlement, the excess together with the
interest accrued in the joint deposit account which
relates to such excess in respect of the period from
the Set-off Expiry Date down to the date of payment,
shall be released from the joint deposit account and
paid to the Vendors within seven days of such
settlement and the balance of any such interest shall
be released to the Purchaser.
29
14.2 A Claim shall be regarded as settled for the purposes of Clause 14.1 if
either:
(a) the Vendors and the Purchaser (or their respective
solicitors) shall so agree in writing; or
(b) a Court has awarded judgment in respect of the Claim
and no right of appeal lies in respect of such
judgment or the parties are debarred whether by
passage of time or otherwise from exercising any such
right of appeal.
14.3 For the avoidance of doubt nothing contained in Clause 14.2 shall
prejudice the right of the Purchaser to make any Claim against the
Vendors under the Warranties or the Tax Deed, nor shall any amount
placed on deposit in accordance with Clause 14.1(b) be taken as
limiting the amount of any lawful claim under the Warranties or the Tax
Deed.
14.4 The selection of the Queen's Counsel for the purposes of Clause 14.1(b)
shall be made by the Purchaser after agreement with the Vendors and
failing agreement within fourteen days of notification by the Purchaser
of its selection on the application of either the Purchaser or the
Vendors by the Chairman of the Bar Council. The Queen's Counsel shall
be instructed by the Purchaser's Solicitors. The Purchaser shall supply
to the Vendors a copy of such instructions to Counsel and the Vendor
shall have the right to make written representations to Counsel.
14.5 If the opinion of the Queen's Counsel is required by the Purchaser and
such Queen's Counsel decides that on the balance of probabilities the
Purchaser will recover in respect of the Claim or Claims, the costs of
such Queen's Counsel shall be borne equally by the Purchaser and the
Vendors. If the Queen's Counsel decides that on the balance of
probabilities the Purchaser will not so recover, the costs of such
Queen's Counsel shall be borne by the Purchaser.
14.6 The Purchaser shall in addition be entitled to set off against the
Further Consideration the amount of any sum agreed or determined to be
payable pursuant to (i) Clause 6.2 of this Agreement or (ii) Clause 12
of this Agreement to the extent that any such sum still remains unpaid.
14.7 Other than as provided in Clauses 14.1 to 14.6 inclusive, all amounts
paid by the Purchaser to the Vendors under this Agreement shall be paid
by the Purchaser on the due date without regard to any right of set-off
to which it would, but for this Clause 14, be entitled and except as
set out in this Clause 14, the Purchaser hereby irrevocably waives any
such right of set-off. For the avoidance of doubt nothing in this
Clause 14 shall be taken to prohibit the Purchaser from exercising any
right of counterclaim.
15. PENSION ARRANGEMENTS
Upon transfer of the employment of the employees of the Company to the
Purchaser pursuant to the Reorganisation, Hero agrees and declares that it will
render such assistance as it is able to provide in connection with the execution
by the trustees for the time being of the Final
30
Salary Scheme of all such deeds and documents as the Purchaser may reasonably
require to substitute it as principal employer of such pension scheme in place
of the Company.
16. EXPERTS
Any Expert appointed pursuant to this Agreement shall act as expert not
as arbitrator and in the absence of manifest error his decisions (both as to the
manner in which his determination is to be made arid as to the subject matter of
its determination) shall be final and binding on the parties but without
prejudice to the Purchaser's right to claim under the Warranties, the Tax Deed
or otherwise in respect of any matter. The parties to this Agreement shall
provide any Expert with such documents in their possession and such information
as he may require. Any Expert shall be entitled to such costs and expenses as
are determined by him, acting in good faith, to be fair and appropriate which
shall be borne between the parties hereto in such proportions as he may
determine or, in default of such determination, equally between the Vendors and
the Purchaser.
17. NOTICES
17.1 Any notice to be given hereunder shall be in writing and delivered by
hand or by first class recorded delivery post or by facsimile letter
addressed and sent to the party to be served (in the case of the
Vendors) at the address given herein and (in the case of the Purchaser)
at its registered office for the time being. Any notice to be given to
the Parent shall be addressed to the Corporate Secretary.
17.2 Notice delivered by hand shall be deemed to have been served at the
time of actual delivery.
17.3 Notice sent by post shall be deemed to have been served at the expiry
of 5 Business Days after posting.
17.4 Notices sent by facsimile shall be deemed to have been served on
production of a transmission report from the machine which sent the
facsimile indicating that the facsimile was sent in its entirety to the
facsimile number of the recipient. Provided that in the event that such
facsimile is received after 4pm (local time) on any Business Day it
shall be deemed served on the Business Day following such date of
transmission.
18. PROPER LAW
18.1 This Agreement shall be governed by, and construed in accordance with,
English Law.
18.2 All of the parties irrevocably agree for the benefit of the other
parties that the Courts of England are to have jurisdiction to hear and
determine any suit, action or proceeding arising out of or in
connection with this Agreement and, for that purpose, irrevocably
submit to the jurisdiction of such Courts.
18.3 All of the parties irrevocably waive any objection which they may at
any time have to the nomination of the Courts of England as the forum
to hear and determine any suit, action
31
or proceedings arising out of or in connection with this Agreement and
agrees that they shall not claim that any such Court is an inconvenient
or inappropriate forum.
18.4 Each Vendor hereby irrevocably authorises and appoints the Vendors'
Solicitors at their London office (or such other firm of solicitors at
an office in England as it may by written notice to the Purchaser
select) to accept service of all legal process arising out of or in
connection with this Agreement and service on such person shall be
deemed to be service on the relevant Vendor.
19. ENTIRE AGREEMENT
19.1 The parties acknowledge and agree:
(a) this Agreement together with any other documents
referred to in this Agreement (together the
"Transaction Documents") constitute the entire and
only agreement between the parties relating to the
subject matter of the Transaction Documents;
(b) none of the parties have been induced to enter into
any Transaction Document in reliance upon, nor have
they been given, any warranty, representation,
statement, assurance, covenant, agreement,
undertaking, indemnity or commitment of any nature
whatsoever other than as are expressly set out in the
Transaction Documents and, to the extent that any
such party has been so induced such party
unconditionally and irrevocably waives any claims,
rights or remedies which any of them might otherwise
have had in relation thereto;
(c) no party has any right to rescind or terminate any
Transaction Documents either for breach of contract
or for negligent or innocent misrepresentation or
otherwise;
(d) (same as expressly provided herein) the rights and
remedies of each party shall be restricted to a claim
for damages or equitable remedies (other than
rescission).
PROVIDED THAT the provisions of this Clause 19 shall not exclude any
liability which any of the parties would otherwise have to any other
party or any right which any of them may have to rescind this Agreement
in respect of any statements made fraudulently by any of them prior to
the execution of this Agreement or any rights which any of them may
have in respect of fraudulent concealment or deliberate non disclosure.
19.2 This Agreement may be varied only by a document signed by each of the
parties and expressly referring to this Agreement.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives on the date shown on the first page.
32
SIGNED by Xxxxx Xxxx ) /s/ Xxxxx Xxxx
AS ATTORNEY )
AND ON BEHALF OF HERO )
in the presence of: )
Xxxxxx Xxxxxx Xxxxxx
Solicitor /s/ Xxxxxx Xxxxxx Xxxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
SIGNED by Xxxxx Xxxx ) /s/ Xxxxx Xxxx
AS ATTORNEY )
AND ON BEHALF OF )
XXXXXXX XXXXX )
LIMITED in the presence of: )
Xxxxxx Xxxxxx Xxxxxx )
Solicitor ) /s/ Xxxxxx Xxxxxx Xxxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
SIGNED by Xxxxx Xxxxxx for ) /s/ Xxxxx Xxxxxx
and on behalf of COTT UK )
LIMITED in presence of: )
Xxx Xxxxxxxxxx
0 Xxxx Xxxx /x/ Xxx Xxxxxxxxxx
Xxxxx, XX0 0XX
SIGNED by Xxxxx Xxxxxx for ) /s/ Xxxxx Xxxxxx
and on behalf of COTT UK )
LIMITED in presence of: )
Xxx Xxxxxxxxxx
0 Xxxx Xxxx /x/ Xxx Xxxxxxxxxx
Xxxxx, XX0 0XX
