Exhibit 99.1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement is made and entered into as of July 28,
1999 by and between Intercorp Excelle Inc., an Ontario corporation ("Buyer"),
and Xxxxxxxx Soup Company Ltd, also an Ontario corporation ("Seller").
RECITALS
WHEREAS, Seller has been engaged since 1979 in the business of
manufacturing and distributing to the retail trade and food service in Canada
A1-brand "original" and "Tex-Mex" steak sauce, packaged in 172 millilitre glass
bottles (the "Business");
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain of the equipment at Seller's facility at 0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxx (the "Facility"), certain inventory of finished
product, raw materials, and packaging and the A1 trademark of Seller, all
related to the Business, on the terms and subject to the conditions set forth
herein; and
WHEREAS all capitalised terms used and not otherwise defined in this
Agreement shall have the meaning ascribed thereto in Schedule R-1 appended to
this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. PURCHASE AND SALE
1.1 PURCHASE AND SALE OF ASSETS. On the terms and subject to
the conditions set forth herein, at the Closing (as hereinafter defined), Seller
shall sell, convey, transfer, and assign to Buyer, and Buyer shall purchase from
Seller, the assets of Seller listed below in this Section 1.1, as such assets
exist on the Closing Date (as hereinafter defined) (collectively, the "Purchased
Assets"):
1.1.1. EQUIPMENT. All of Seller's right, title,
and interest in and to the equipment and spare parts located at the Facility
used by Seller exclusively in connection with the Business, including but not
limited to the equipment set forth on SCHEDULE 1.1.1 hereto and all related
manuals located at the Facility (collectively, the "Equipment").
1.1.2. INVENTORY. All of Seller's right, title,
and interest in and to the finished A1 steak sauce inventory and raw material
inventory of packaging and ingredients as set forth in SCHEDULE 1.1.2 hereto
(collectively, the "Inventory"), which schedule reflects the physical inventory
conducted on July 26, 1999 under Buyer's supervision to confirm the quantities
and other information stated therein.
1.1.3. TRADEMARK. TRADE XXXX. All of Seller's
right, title and interest in and to the trade xxxx "A1" and registration number
XXXX00000 (including all renewals) and all goodwill relating to or associated
with such trade xxxx and trade xxxx registration and the right to xxx for and
collect damages for past infringement of such trade xxxx and trade xxxx
registration (collectively, the "Trademark").
1.1.4. PROPRIETARY INFORMATION. All formulae,
recipes, and procedures, all ingredients, and packaging and supplier
specifications and lists, all films for labels, all promotional materials, and
all know-how, trade secrets and other information not generally available to the
public and any other proprietary rights of Seller used by Seller exclusively in
connection with the Business (collectively, "Proprietary Information").
1.1.5. ASSIGNED AGREEMENTS. All of Seller's interest
in and rights under all contracts and agreements set forth on SCHEDULE 1.1.5
hereto (the "Assigned Agreements").
1.2. ASSUMPTION OF CERTAIN LIABILITIES. Effective as of the
Closing, Buyer hereby assumes and agrees to pay, discharge, and perform, as
appropriate, all of the liabilities and obligations of Seller under each of the
Assigned Agreements as of the Closing Date and the liabilities and obligations
of the Business arising after the Closing (the "Assumed Obligations"). Buyer
shall not assume or in any way be liable or responsible for any liabilities,
obligations, claims, costs or expenses of any kind and description, matured or
unmatured, absolute or contingent, known or unknown, whenever arising, of Seller
(including, without limitation, any liabilities or obligations of Seller to its
past or current employees or to any trade customers of Seller in respect of
sales made prior to the Closing Date) other than the Assumed Obligations.
1.3. PURCHASE PRICE. In consideration of the sale, assignment,
transfer and delivery of the Purchased Assets, at the Closing, Buyer shall pay
to Seller a purchase price of ONE MILLION EIGHT HUNDRED SEVENTY-SEVEN THOUSAND
AND ONE HUNDRED ELEVEN DOLLARS (C$1,877,111), which purchase price is equal to
the sum of C$1,725,000 plus the total dollar value of the Inventory as shown on
Schedule 1.1.2 (the "Purchase Price"), and shall assume or discharge the Assumed
Obligations.
1.4. ALLOCATION OF PURCHASE PRICE. The consideration for the
Purchased Assets specified in SECTION 1.4 shall be allocated among the Purchased
Assets as provided in SCHEDULE 1.4 hereto. Seller and Buyer agree to use such
allocation for tax and all other purposes.
1.5. TAXES. Buyer shall promptly after Closing pay (and/or
make claims for exemption in respect of) GST and any and all federal and
provincial sales and transfer taxes arising from the purchase and sale of the
Purchased Assets pursuant to this Agreement, for which Seller has an obligation
to collect or remit.
1.6. EXPENSES. Except as otherwise expressly provided herein,
any expenses incurred by any party in connection with the preparation, execution
and delivery of this
2
Agreement or the performance of such party's obligations hereunder shall be
borne by the party incurring such expense.
2. CLOSING
2.1. CLOSING AND CLOSING DATE. The closing (the "Closing") of
the purchase and sale of the Purchased Assets shall take place simultaneously
with the execution of this Agreement at the hour of 11:00 a.m. (Toronto time)
(the "Closing Time") on the date first above written (the "Closing Date") at the
offices of Seller at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0 or such
other time and date as the parties hereto may mutually agree.
2.2. DELIVERIES BY SELLER. At the Closing, Seller shall
execute and deliver to Buyer (a) a xxxx of sale in the form attached hereto as
EXHIBIT A; (b) an assignment of the Trademark in the form attached hereto as
EXHIBIT B; and (c) such other certificates as to corporate status and authority
and instruments of conveyance, transfer, and assignment as Buyer may reasonably
request or are reasonably necessary or appropriate to vest in Buyer ownership of
the Purchased Assets. On the Closing Date Seller shall make delivery of
Inventory consisting of ingredients, packaging, and other raw material F.O.B.
Seller's loading dock at the Facility and of Inventory consisting of finished
product of A1 Steak Sauce F.O.B. third-party warehouse, Excel, at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxx, for Buyer's acceptance and its further handling and
transport at Seller's sole expense, except for that portion of the Inventory to
remain in the possession of certain vendors of the Business on their premises as
indicated in SCHEDULE 1.1.2 for the benefit of Buyer. Upon reasonable prior
notice by Buyer given no later than September 1, 1999, Seller shall provide
reasonable access to Buyer and its designees to the Equipment and in and through
Facility for a period of three consecutive business days at the Facility, so
that Buyer may, and Buyer shall no later than September 15, 1999, at its sole
expense, disassemble, handle, remove, and transport the Equipment from the
Facility; PROVIDED that Seller shall provide technical assistance as specified
in SECTION 6.1 below, and PROVIDED FURTHER that the glass bottle mold listed in
SCHEDULE 1.1.1 shall remain in the possession of a certain vendor of the
Business on its premises as indicated in SCHEDULE 1.1.1 for the benefit of
Buyer.
2.3. DELIVERIES BY BUYER AT CLOSING. At the Closing, Buyer
shall deliver to Seller a certified cheque, certified by a bank acceptable to
Seller, in Canadian dollars and in the amount of C$1,827,111.00, equal to the
Purchase Price less the sum of C$50,000 withheld at Closing and payable as
provided in Section 2.4, and shall execute and deliver such documents as Seller
requests and are reasonably necessary or appropriate for Buyer to assume or
discharge the Assumed Obligations.
2.4 PAYMENT OF HOLDBACK. On July 28, 2000 Buyer shall pay to
Seller, by certified cheque (certified by a bank acceptable to Seller) the sum
of C$50,000; PROVIDED that Buyer shall be released of its obligation under this
Section 2.4 to make such payment, and the Purchase Price shall be deemed to be
reduced by such sum, if and only if, on July 28, 2000, Buyer actually delivers
to Seller (at Seller's addresses specified in Section 8.2(b)) reasonably
acceptable evidence that a third party unrelated to the Buyer has in good faith
filed with the Trade-Marks Office an opposition or challenge, which is still
pending or successfully resolved in
3
favour of such third party as of July 28, 2000 (or as of the latest date
preceding July 28, 2000 for which such evidence is reasonably available), with
respect to an application by Buyer with the Trade-Marks Office either (i) to
amend the existing registration of the Trademark or (ii) to obtain a new
registration of the "A1" trade xxxx to include specifically "steak sauce" in the
description of wares, without any other material changes from the existing
description of wares in the registration of the Trademark. For the avoidance of
doubt, Buyer shall be released from its payment obligation under this Section
2.4 only by such delivery of acceptable evidence, regardless of any delay or
failure by Buyer to file such application, and such payment obligation shall not
be subject to any setoff, deduction, or other withholding. Notwithstanding the
foregoing, Buyer shall promptly make such payment upon (a) the expiry of any
applicable period for the filing of a objection or challenge with respect to
such application filed by Buyer, if no timely objection or challenge has been
filed, or (b) the successful resolution by the Trade-Marks Office of any such
objection or challenge in Buyer's favour.
3. AS-IS
Buyer acknowledges and agrees that, subject solely to Seller's
representations and warranties contained in ARTICLE 4 and Seller's
indemnification obligations contained in ARTICLE 8, Buyer is purchasing the
Purchased Assets under this Agreement on an "as-is, where-is" basis. Buyer
acknowledges and agrees that it is relying on its own investigation and
inspection of the Purchased Assets and its conduct and review of all tests,
investigations, reports and studies as it has deemed appropriate under the
circumstances in connection with Buyer's purchase of the Purchased Assets
hereunder, and not on any materials provided to Buyer by Seller or its
representatives in the course of Buyer's investigation of the Purchased Assets.
Buyer acknowledges and agrees that, except as explicitly set forth in ARTICLE 4,
Seller has not made any representation or warranty, express or implied, written
or oral, concerning the Purchased Assets or any use to which the Purchased
Assets may or may not be put or applied, any materials or information provided
by Seller to Buyer in the course of Buyer's due diligence examination, or any
other matter in any way relating to or arising out of this Agreement and the
transactions contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, and hereby acknowledges that
Buyer is relying on such representations and warranties, as follows:
4.1. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. Seller
is a corporation duly incorporated and validly existing under the laws of the
Province of Ontario. Seller has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and effect the
transactions contemplated hereby. All requisite action has been taken or will
have been taken by Seller prior to the Closing to authorise and approve the
execution, delivery and performance of this Agreement by Seller. This Agreement
has been duly executed and delivered by Seller and the obligations of Seller
under this Agreement are legal, valid and binding obligations, enforceable in
accordance with the terms hereof except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws
4
affecting the enforcement of creditors' rights generally and limitations on the
availability of equitable remedies.
4.2. TITLE TO PURCHASED ASSETS. Seller owns or has the lawful
right to sell, assign, transfer, and convey all of the Purchased Assets to
Buyer, free and clear of all mortgages, liens, charges, claims, restrictions,
pledges and security interests and encumbrances, and no Person has any
agreement, option, understanding, or commitment, or any right or privilege,
(whether by law, pre-emptive or contractual) capable of becoming an agreement,
option or commitment, for the purchase or other acquisition from Seller of any
of the Purchased Assets, or any rights or interest therein, other than in the
ordinary course of the Business.
4.3. INVENTORY. Seller owns or has the lawful right to sell,
assign, transfer, convey, and deliver all of the Inventory to Buyer, free and
clear of all mortgages, liens, charges, claims, restrictions, pledges and
security interests and encumbrances. Such inventory is of a quality that is
usable and saleable in the ordinary course of the Business.
4.4. TRADE XXXX. The Trademark is valid and subsisting and
held by Seller with good and marketable title and is in good standing. Seller's
use of the Trademark in association with the Business has been continuous and
uninterrupted and has not been subject to challenge before the Trade Xxxx
Office, nor has the Trademark been the subject of litigation involving Seller,
since the assignment of the Trademark effective April 1, 1980 to Canvin Products
Ltd., then a wholly owned subsidiary of Seller. To Seller's knowledge, there has
not been since April 1, 1980 any objection, challenge, or claim that Seller does
not have the right to use the Trademark in association with steak sauce in
Canada. For purpose of this Section 4.4 and Sections 4.12 and 4.13 below,
"knowledge" means the actual knowledge of the President, any Vice President, the
Corporate Secretary, the Assistant Corporate Secretary, and the general manager
of the Facility of Seller.
4.5. NO VIOLATION OR CONFLICT. The execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated hereby do not and will not conflict with or violate any Law, the
articles or bylaws of Seller, or any contract or agreement, written or oral, to
which Seller is a party or by which it is bound.
4.6. ASSIGNED AGREEMENTS. Seller has fully performed each
term, covenant, and condition of each of the Assigned Agreements which is to be
performed by it at or before the Closing Date. Each of the Assigned Agreements
is in full force and effect and constitutes a legal and binding obligation of
the respective parties thereto. Other than the Assigned Agreements, no consent
or approval by any customer, supplier or other Person is required to implement
the purchase of the Business and the Purchased Assets by Buyer.
4.7. TAXES AND WITHHOLDINGS. Seller has made all required
withholdings, income taxes, goods and services taxes, sales taxes and other
similar remittances, source deductions and other similar amounts payable to
governmental authorities under applicable Laws in respect of the Business when
due and there are no liens, charges or other similar security interests in
favour of any such authority (other than inchoate liens for amounts currently
accruing due) in connection therewith. Seller has paid or made provision for, or
has or will have assets
5
(other than the Purchased Assets) available to pay, all federal, provincial, and
local taxes and other governmental charges with respect to the Purchased Assets
and the Business outstanding as of the Closing Date. The Seller has completed
and filed in a timely manner all required returns, reports and filings with
respect to such taxes and charges.
4.8. NO CONTRACTS OR COMMITMENTS. Except for the Assigned
Agreements, Seller has not entered into or become bound by any contract or
commitment with respect to the Business not disclosed under this Agreement that
would be binding on Buyer after the Closing Date.
4.9 CUSTOMER SUPPORT AND PROMOTIONAL PROGRAMS. For the
avoidance of doubt, neither the Assigned Agreements nor the Assumed Obligations
shall include any arrangements or obligations relating to customer support or
promotional programs available to trade customers of the Business from time to
time (the "Programs") prior to Closing, and the Programs shall form no part of
this transaction. Notwithstanding anything else in this Agreement to the
contrary, Seller makes no representation or warranty in respect of those
Programs made available by Seller prior to Closing and shall have no liability
whatsoever to Buyer under this Agreement in respect of the continuation, change,
or discontinuation of any Programs after Closing, including but not limited to
the loss of any accounts or business by Buyer in connection with any attempt to
continue, change, or discontinue any of the Programs by Buyer or any third
party.
4.10. RESIDENCE OF THE SELLER. Seller is not a non-resident
person of Canada within the meaning of the INCOME TAX ACT (Canada).
4.11. BROKERS. Seller is not liable for any brokerage fee,
finder's fee, commission or other compensation to any agent or broker in respect
of this Agreement or the transactions contemplated hereby.
4.12 LITIGATION. To Seller's knowledge there is not as of the
Closing Date any litigation, arbitration, proceeding, governmental
investigation, or other action of any kind pending, proposed, or threatened
against or by Seller in relation to the Business or any Purchased Assets.
4.13 NO LICENSES OR PERMITS. To Seller's knowledge, Seller's
manufacture of steak sauce at the Facility as part of the Business has not
required Seller to obtain or have any particular or additional license, permit,
approval, qualification, or government authorisation under applicable Laws for
such manufacture other than such licenses, permits, approvals, qualifications,
or other government authorisations as required of the Facility without the
Business.
Each of the representations and warranties of Seller set forth
in this ARTICLE 4 shall survive for one (1) year following the Closing Date and
thereafter shall have no further force or effect, with the exception that the
representations and warranties set forth in Sections 4.7 (and the rights of
Buyer to seek indemnification under Section 7.1 in respect of such
representations and
6
warranties), which shall survive until the expiry of any applicable statutory
limitation periods. The expiry of representations and warranties in this Article
4 shall not affect the right of any party to prosecute to conclusion any claim
made by it, provided that notice is given to the other party before the expiry
of the applicable survival period.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, and hereby acknowledges
that Seller is relying on such representations and warranties, as follows:
5.1. AUTHORITY, EXECUTION AND DELIVERY; ENFORCEABILITY. Buyer
is a corporation duly incorporated and validly existing under the laws of the
Province of Ontario. Buyer has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and effect the
transactions contemplated hereby. All requisite action has been taken or will
have been taken by Buyer prior to the Closing to authorise and approve the
execution, delivery and performance of this Agreement by Buyer. This Agreement
has been duly executed and delivered by Buyer and the obligations of Buyer under
this Agreement are legal, valid and binding obligations, enforceable in
accordance with the terms hereof except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and limitations on the availability
of equitable remedies.
5.2. NO VIOLATION OR CONFLICT. The execution, delivery and
performance of this Agreement by Buyer and the consummation of the transactions
contemplated hereby do not and will not conflict with or violate any Law, the
articles or bylaws of Buyer, or any contract or agreement, written or oral, to
which Buyer is a party or by which it is bound.
5.3. BROKERS. Buyer is not liable for any brokerage fee,
finder's fee, commission or other compensation to any agent or broker in respect
of this Agreement or the transactions contemplated hereby.
Each of the representations and warranties of Buyer set forth
in this ARTICLE 5 shall survive for one (1) year following the Closing Date and
thereafter shall have no further force or effect. The expiry of such
representations and warranties in this Article 5 shall not affect the right of
any party to prosecute to conclusion any claim made by it, provided that notice
is given to the other party before expiry of the applicable survival period.
6. COVENANTS
6.1. TRANSITION SERVICES. Seller shall, at Seller's sole
expense and as Buyer reasonably requests, provide to Buyer (a) no more than a
total of four (4) man days of services by technical personnel of Seller, from
time to time during the period beginning on the Closing Date and ending on the
second business day thereafter, to assist Buyer at the Facility in its removal
of the Equipment pursuant to SECTION 2.2(a) above and (b) no more than a total
of six (6) man days
7
of services by technical personnel of Seller, during normal business hours on
reasonably convenient dates after the Closing Date and before October 1, 1999,
and after at least twenty (20) days' prior notice by Buyer, to assist Buyer at a
facility of Buyer in the Toronto, Ontario area to install and put into operation
the Equipment.
6.2 REFERRALS AND DELIVERIES. After the Closing, Seller shall
(i) refer to Buyer any and all inquiries or other communications received from
customers, potential customers or suppliers related to the Purchased Assets; and
(ii) deliver to Buyer any and all purchase orders received by Seller relating to
the Purchased Assets.
6.3. BOOKS AND RECORDS. Seller shall provide Buyer with a copy
of such existing financial, quality assurance, operational, and production
records and records of Programs of Seller specifically and exclusively relating
to the Business and dating since August 1, 1994 as Buyer may reasonably request.
6.4 PUBLIC ANNOUNCEMENTS. Seller agrees that Buyer may, at its
option and expense, but subject to the prior approval of Seller, make a public
announcement with respect to the transactions contemplated by this Agreement or
the existence of this Agreement. Buyer shall review any such announcement with
Seller and obtain its written approval (such approval not to be unreasonably
withheld) prior to the publication of the announcement.
6.5. CONFIDENTIALITY. Buyer and Seller acknowledge and agree
that the binding terms and conditions of the letter of May 28, 1999 and of the
confidentiality agreement dated January 27, 1997 and extended from February 5,
1999 between Buyer and Seller are hereby incorporated by reference in this
Agreement and shall continue in full force and effect in accordance with the
terms thereof, provided that, notwithstanding the terms and conditions of such
letter agreements, such letter agreements shall survive any termination of this
Agreement.
6.6. EMPLOYEES. Seller shall remain responsible for all
salaries, wages, accrued vacation, severance payments and other benefits and/or
liabilities to its employees which were earned or accrued prior to the Closing
Date or as a result of the Closing. Buyer shall have no obligation to hire any
employees of Seller.
6.7. TOLL MANUFACTURING. Upon at least fourteen (14) days'
prior notice by Buyer, Seller shall, during two (2) regular production shifts on
consecutive business days at the Facility after the Closing Date but before
September 15, 1999, operate the Equipment at the Facility as an independent
contractor for Buyer, using ingredients, packaging, and other raw materials to
be supplied or made available by Buyer to Seller, F.O.B. Seller's Facility, at
Buyer's sole expense, in a timely fashion and in adequate quality and quantities
(and subject to such supply or availability or quality), to produce a maximum of
up to two (2) normal production runs consisting of A1 "original" and/or
"Tex-Mex" steak sauce, at Buyer's discretion. Seller shall make delivery to
Buyer F.O.B. Seller's Facility, for which Buyer shall pay Seller a price of
C$3.00/case, payable within thirty (30) days' after delivery.
8
6.8. NON-COMPETITION. For a period of five (5) years from the
Closing, Seller and its affiliates shall not, and shall cause each of their
respective affiliates not to, directly or indirectly, in any capacity (whether
as principal, agent, owner, partner, consultant, shareholder, or otherwise) own,
operate, or be engaged in any business, proprietorship, or other venture
involving the manufacture, distribution or sale of steak sauce in Canada in
competition with any steak sauce manufactured, distributed and sold by Buyer
(collectively, "Competitive Activities"). Notwithstanding anything to the
contrary contained in this Section 6.8, Buyer hereby agrees that the foregoing
covenant shall not be deemed breached as a result of the ownership by Seller or
any affiliate of Seller of: (i) less than an aggregate of 15% of any class of
stock of a Person engaged in Competitive Activities; or (ii) a Person which
engages, directly or indirectly, in Competitive Activities if such Competitive
Activities account for less than 15% of such Person's consolidated annual
revenues.
6.9. FURTHER ASSURANCES. From time to time after the Closing
Date, upon the reasonable request of Buyer, Seller shall execute and deliver or
cause to be executed and delivered such further instruments of conveyance,
assignment and transfer and take such further action (including without
limitation procuring any required consents or approvals necessary to convey the
Purchased Assets to Buyer, the receipt of which at or prior to Closing has been
waived by Buyer) as Buyer may reasonably request to sell, assign, convey,
transfer, reduce to possession and record title to any of the Purchased Assets
including, without limitation, to record the transfer and assignment of the
Trademark and the transfer of or reapplication for the UPC Codes for A1 steak
sauce used in the Business in all such registries as Buyer may reasonably
request. Seller agrees to cooperate with Buyer in all reasonable respects to
assure to Buyer the continued title to and possession of the Purchased Assets in
the condition and manner contemplated by this Agreement.
7. INDEMNIFICATION
7.1. INDEMNIFICATION BY SELLER. Subject to SECTIONS 7.2 AND
8.6, Seller agrees to indemnify and hold harmless Buyer and its officers,
directors, employees, agents and representatives (each, an "Indemnified Party"),
and each of them, against and in respect of any and all actual out-of-pocket
losses, liabilities, costs, expenses (including reasonable attorneys' fees and
legal expenses), damages and deficiencies (collectively, "Damages") relating to,
resulting from or otherwise incurred in connection with:
(a) any misrepresentation or breach of any representation,
warranty, covenant, agreement, undertaking or obligation of
Seller contained in this Agreement or any other agreement or
instrument delivered pursuant to this Agreement;
(b) non-compliance with any applicable bulk sales law or similar
legislation;
(c) the operation and ownership of the Purchased Assets prior to
the Closing Time; and
9
(d) any suit, action or other proceeding brought by any
Governmental Entity or Person arising out of any of the
matters referred to in subsections (a) through (c) above.
7.2. LIMITATION ON INDEMNIFICATION.
7.2.1. SURVIVAL LIMITATION. The Indemnified Parties'
rights to indemnification under Section 7.1 shall be available only if the
Indemnified Party entitled to indemnification pursuant thereto delivers written
notice to Seller setting forth in reasonable detail the factual basis for
indemnification and the amount thereof or a good faith estimate thereof sought
to be indemnified prior to the expiration of the one (1) year period following
the Closing Date.
7.2.2. LIMITATION ON INDEMNIFIABLE AMOUNT. The
Indemnified Parties may not recover, and Seller shall not be required to pay or
otherwise be responsible for, any Damages pursuant to SECTION 7.1 until the
Indemnified Parties, taken together, shall have incurred or paid without
reimbursement or repayment aggregate Damages equal to C$50,000 by reason of
matters with respect to which the Indemnified Parties would otherwise be
indemnified by Seller under SECTION 7.1. Notwithstanding any provision of this
Agreement to the contrary, the maximum amount of Damages for which Seller shall
be liable pursuant to SECTION 7.1 shall be equal to fifty percent (50%) of the
Purchase Price, provided that this limitation of liability shall not apply to
indemnification pursuant to SUBSECTION 7.1(C).
7.2.3. REDUCTION FOR TAXES AND INSURANCE PROCEEDS. In
calculating any amount of Damages payable pursuant to SECTION 7.1, the amount of
any such Damages shall be reduced by any net tax benefit actually realised by
the relevant Indemnified Party as a result of such Damages (whether in the form
of an actual refund or a reduction in any tax that would otherwise have been
payable) and/or the amount of any insurance proceeds received as a result of the
event or facts giving rise or relating to such Damages. In computing the amount
of any such tax cost, the Indemnified Party shall be deemed to recognise all
other items of income, gain, loss, deduction or credit before recognising any
items arising from the receipt or accrual of any indemnity payment hereunder or
the incurrence or payment of any Damages payable pursuant to SECTION 7.1. If an
Indemnified Party actually receives any insurance proceeds following an
indemnification payment by Seller and such insurance proceeds cover any amount
of Damages already paid for by such indemnification payment, the Indemnified
Party shall return to Seller the amount of Damages so paid for.
7.2.4. NOTICE AND DEFENCE. As soon as reasonably
practical after any Indemnified Party determines that it has a claim for
indemnification under this ARTICLE 7, such Indemnified party shall so notify
Seller, and such notice shall specify the facts giving rise to such claim and
the alleged basis for such claim, and the amount (or a reasonable estimate
thereof) of liability for which indemnity is asserted. The party against whom
any such claim for indemnification is made shall have the right to conduct and
control the defence or settlement of any claim, action, suit or proceeding
giving rise to such claim for indemnification, provided that Buyer shall have
the right to approve counsel to Seller (but shall not unreasonably withhold,
10
condition, or delay such approval) and all parties shall co-operate in
furnishing information and assistance relating to such defence or settlement. In
addition, Buyer shall have the right to participate, at its own expense, with
respect to any such claim, action or proceeding, and no such claim, action or
proceeding shall be settled without the prior written consent of the Buyer,
acting reasonably.
8. MISCELLANEOUS
8.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No party may assign any of its rights, or delegate any
of its duties or obligations, under this Agreement without the prior written
consent of the other party, and any such purported assignment or delegation
shall be void AB INITIO; PROVIDED that Buyer may assign its rights under this
Agreement to a wholly owned subsidiary of Buyer.
8.2. NOTICES. All notices, demands and other communications
given or made pursuant to this Agreement (collectively, "notice" or "notices")
shall be in writing and shall be deemed to have been duly given if sent by
registered or certified mail, return receipt requested, postage and fees
prepaid, or by overnight service with a nationally recognised "next day"
delivery company such as Federal Express or United Parcel Service, or by
facsimile transmission, or otherwise actually delivered to the party at its
respective addresses:
(a) If to Buyer -
Intercorp Excelle Inc.
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Chief Operating Officer
Fax: 000-000-0000
with a copy to:
Xxxxxxxxx Xxxx Xxxxxxx Apps & Dellelce
Suite 810
1 First Canadian Place
Toronto, Ontario
M5X 1A9
Attention: Xxxx Apps
Fax: (000) 000-0000
(b) If to Seller -
Xxxxxxxx Soup Company Ltd
00 Xxxxxxxxxx Xxxxxx
00
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Corporate Secretary
Fax: 000-000-0000
with a copy to:
Xxxxxxxx Soup Company
Xxxxxxxx Place Camden, NJ 08103-1799 U.S.A.
Attention: Corporate Secretary
Fax: 000-000-0000
Any notice shall be deemed duly given when received by the addressee thereof,
provided that any notice sent by registered or certified mail shall be deemed to
have been duly given two business days from the date of deposit in the mail,
unless sooner received. Any of the parties to this Agreement may from time to
time change its address for receiving notices by giving notice thereof in the
manner set forth above.
8.3. AMENDMENT; WAIVER. No provision of this Agreement may be
waived, amended or supplemented unless in writing signed by all of the parties
to this Agreement, and the waiver, amendment or supplement of any one provision
of this Agreement shall not be deemed to be a waiver, amendment or supplement of
any other provision.
8.4. GOVERNING LAW. This Agreement shall be governed by and
construed both as to validity and performance and enforced in accordance with
the laws of the Province of Ontario without giving effect to the choice of law
principles thereof.
8.5. NO ADVERSE CONSTRUCTION. The rule that a contract is to
be construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or the terms of this
Agreement.
8.6. LIMITATION OF LIABILITY. Notwithstanding anything to the
contrary in this Agreement, in no event shall any party hereto be liable for any
incidental, consequential or punitive damages or lost profits arising from any
failure to perform or the breach of any obligation under this Agreement.
8.7. INCOME TAX POSITION. Neither Buyer nor Seller shall make
any filings or take a position for income tax purposes which is inconsistent
with this Agreement.
8.8. NO THIRD-PARTY BENEFICIARIES. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
12
8.9. INTERPRETATION. In this Agreement, except to the extent
that the context otherwise requires: (i) words denoting the singular include the
plural and vice versa; (ii) words denoting individuals include corporations and
other entities, and vice versa; (iii) words denoting any gender include all
genders; (iv) references to any document, agreement or other instrument
(including this Agreement) include references to such document, agreement or
other instrument as amended, novated, supplemented or replaced from time to
time; (v) references to articles, sections, schedules and exhibits are to
Articles, Sections, Schedules and Exhibits of this Agreement; (vi) "or" is not
exclusive; and (vii) "including" means including, without limitation.
8.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
8.11. HEADINGS. The article, section and subsection headings
contained in this Agreement are included for convenience only and form no part
of the agreement between the parties.
8.12. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
8.13. ENTIRE AGREEMENT. This Agreement and the other
agreements and documents contemplated and delivered pursuant hereto constitute
and embody the entire understanding and agreement of the parties hereto relating
to the subject matter hereof and there are no other agreements, negotiations or
understandings, written or oral, in effect between the parties relating to such
subject matter except as expressly referred to herein.
13
IN WITNESS WHEREOF, this Asset Purchase Agreement has been executed by
the parties hereto as of the date first set forth above.
BUYER:
INTERCORP EXCELLE INC.
By: /s/
--------------------------------
Name: [Xxxxx Xxxxx]
Title: [CEO]
SELLER:
XXXXXXXX SOUP COMPANY LTD
By: /s/
--------------------------------
Name: G. Xxxx Xxxxxx
Title: Vice President, Finance
14
EXHIBIT A
XXXX OF SALE
------------
This is a XXXX OF SALE, dated July 28, 1999 from Xxxxxxxx Soup Company
Ltd, an Ontario corporation ("Seller"), to Intercorp Excelle Inc., also an
Ontario corporation ("Buyer"). Capitalised terms used without definition in this
Xxxx of Sale shall have the meanings given to them in the Asset Purchase
Agreement (the "Agreement"), dated as of July 28, 1999 between Seller and Buyer.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged Seller hereby sells,
conveys, transfers, and assigns to Buyer, without recourse, representation, or
warranty except as otherwise expressly provided in the Agreement, and Buyer
hereby acquires, all of Seller's right, title, and interest in and to the
Purchased Assets.
This Xxxx of Sale shall be binding upon the successors and assigns of
Seller and shall inure to the benefit of the successors and assigns of Buyer as
permitted under the Agreement.
IN WITNESS WHEREOF, the parties have executed this Xxxx of Sale as of
the date first set forth above.
SELLER: BUYER:
Xxxxxxxx Soup Company Ltd Intercorp Excelle Inc.
By: /s/ By: /s/
-------------------------------- --------------------------------
Name: G. Xxxx Xxxxxx Name: [Xxxxx Xxxxx]
Title: Vice President, Finance and CFO Title: [CEO]
15
EXHIBIT B
TRADE XXXX ASSIGNMENT
This ASSIGNMENT is made July 28, 1999 between Xxxxxxxx Soup Company
Ltd, an Ontario corporation ("Assignor"), and Intercorp Excelle Inc., an Ontario
corporation ("Assignee").
WHEREAS, Assignor is the owner of Canadian Trade Xxxx Registration
XXXX00000 for the xxxx A1 (the "Trademark").
WHEREAS, Assignor has agreed to assign the Trademark to Assignee, and
Assignee has agreed to accept such assignment, under the Asset Purchase
Agreement, dated July 28, 1999 (the "Agreement");
NOW, THEREFORE, in consideration of the sum of two Canadian dollars
(C$2.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor hereby assigns to Assignee, and
Assignee hereby accepts from Assignor, full right to and title in the Trademark,
including the right to take action for any and all past infringement of the
Trademark, together with the goodwill of the business associated with the
Trademark.
This Assignment shall be binding upon the successors and assigns of
Assignor and shall inure to the benefit of the successors and assigns of
Assignee as permitted under the Agreement.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first set forth above.
ASSIGNOR: ASSIGNEE:
Xxxxxxxx Soup Company Ltd Intercorp Excelle Inc.
By: /s/ By: /s/
-------------------------------- --------------------------------
Name: G. Xxxx Xxxxxx Name: [Xxxxx Xxxxx]
Title: Vice President, Finance and CFO Title: [CEO]
16
SCHEDULE R-1
DEFINITIONS
-----------
When used in this Agreement, the following terms shall have the meanings
specified:
"AGREEMENT" means this Asset Purchase Agreement, together with the
Schedules and Exhibits attached hereto, as the same shall be amended from time
to time in accordance with the terms hereof.
"GOVERNMENTAL ENTITY" means (i) any multi-national, federal,
provincial, state, municipal, local or other governmental or public department,
court, commission, board, bureau, agency or instrumentality, domestic or
foreign; (ii) any subdivision, agent, commission, board, or authority of any of
the foregoing; or (iii) any quasi-governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account of any of
the foregoing.
"LAW" means any federal, provincial, local, foreign or other law, or
governmental requirement of any kind, and the policies, guidelines, orders,
decrees, directives, judgments, rules, regulations and orders promulgated
thereunder, as well as the common law as interpreted and enforced by courts of
competent jurisdiction.
"PERSON" means an individual, corporation, company, co-operative,
partnership, trust, unincorporated association, entity with juridical
personality, or Governmental Entity and pronouns referring to a Person have a
similarly extended meaning.
17
SCHEDULE 1.1.1
EQUIPMENT
TAG NO. DESCRIPTION OF EQUIPMENT PROVISO
------- ------------------------ -------
054041661301 Service piping to A1 installation
052041161401 Bottle cleaner
054041660601 Blending deck A1 fabricate and install
052041161701 Tube in tube heat exchanger extension for A1
052041161801 Tubular heat exchanger for cooking A1
052041161101 A1 Xxxxxxxxx
052041161601 Vacuum pump - A1 filler
054041660801 Bottle filler upgrade and platform
054041661501 Upgrade of electric controls and motors - A1
054041160401 A1 line capper glass
054041661901 Pneumatic capper - A1 dies
052041161301 Krones labeller
054042643901 Domino ink jet printer A1
054042700001 Microjet Mult II printer A1
054041661201 Sellers jet & nozzle A1 area
052041236701 3-M Case sealer for A1
N/A Glass mould PROVISO A: This item is located at the
(located at Consumers Glass, indicated vendor held for Buyer's account.
000 Xxxxxxx Xxx. Xxxx, Xxxxxxx)
052041162001 Blow mould A1 PET container (located at PROVISO B: This item is believed to be
Silgan Plastics, formerly Express Plastics, located at the indicated vendor;
0000 Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx) notwithstanding anything in this
Agreement to the contrary, however, Seller
shall be obligated only to use reasonable
efforts to locate and deliver to Buyer this
item and shall have no liability to Buyer
for this item if, despite such
18
efforts, this item is not found.
PROVISO C: This item has not been used in the
Business and is not usable or workable in its
current condition.
054041661801 Change parts for 15 valve A1 PROVISO C applies to this item.
filler (plastic)
054041662101 Labeller change parts A1 plastic PROVISO C applies to this item.
19
SCHEDULE 1.1.2
INVENTORY
TYPE: CODE DESCRIPTION UNIT PRICE QUANTITY VALUE
---------- ----------- ---------- -------- -----
FINISHED PRODUCT:
17000 A1 Sauce (cases) C$10.2214 11,162 $114,091
17002 A1 Tex Mex Sauce (cases) $10.1578 240 $2,438
PACKAGING:
10630577970 Glass Bottles (Proviso D) $0.319 *54,720 $17,456
840 $268
10630577993 Lid - Tex Mex $0.019 72,800 $1,383
10630777810 Label - Body Tex Mex $0.009 72,750 $654
10630777815 Label - Neck Tex Mex $0.003 86,000 $258
10630877915 Partitions (Proviso D) $0.123 **8,032 $988
*4,560 $561
10630888225 Cases (Proviso D) $0.141 *4560 $643
**4717 $665
10630577990 Lids - A1 Blue $0.018 36,000 $648
10630777800 Label - Body A1 $0.008 22,000 $176
10630777805 Label - Neck A1 $0.003 116,500 $349
10630060013 Liquid Glue (in pails) $3.050 95 $288
INGREDIENTS:
06000070291 Starch - Tomex 105 $1.634 594 $970
14630060306 Prepared Date Base $0.646 8,814 $5,694
06000070551 Carmel Colour - Acid Pr. $0.4863 429 $209
06000070561 Spice Blend for A1 $2.5723 331 $851
03000003800 Tomatoes - Crushed $0.4261 500 $213
06000006175 Orange Marmalade $0.6143 669 $411
06000070290 Date Puree - Heavy $0.5613 540 $303
06000070558 Chutney $0.6751 741 $500
06000070560 Apples - Pureed $0.6982 133 $93
03000003588 Pepper Puree - Jalapeno $0.978 ***2340 $2,289
========
TOTAL $152,111
20
SCHEDULE 1.1.2 (cont'd)
*PROVISO D: The quantity of the items of Inventory marked above with asterisks
are held at the vendor of the item at the vendor's location in the Toronto
area for the account of Buyer and shall not be moved or delivered by Seller
pursuant to this Agreement. One asterisk ("*") indicates Inventory held at
Thomson Terminals, 000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx; while two asterisks
("**") indicates Inventory held at Consumer's Glass, 000 Xxxxxxx Xxx. Xxxx,
Xxxxxxx, Xxxxxxx, and three asterisks ("***") indicates Inventory held at
Confederation Freezers, 000 Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx.
21
SCHEDULE 1.1.5
ASSIGNED AGREEMENTS
********************************************************************************
Seller Purchase Order Nos. 316774 and 322926 to Consumers Glass, 000 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0.
********************************************************************************
22
SCHEDULE 1.4
ALLOCATION OF PURCHASE PRICE
********************************************************************************
Equipment (including spare parts): $505,000
Inventory: $152,111
Goodwill and Proprietary Information: $1,220,000
********************************************************************************
23
