Exhibit 2.5
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BY AND AMONG
ROYAL CROWN COMPANY, INC.,
COTT CORPORATION
AND
BCB USA CORP.
Dated as of June 13, 2001
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TABLE OF CONTENTS
PAGE
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Article I PURCHASE AND SALE OF ASSETS................................. 1
1.1 Purchase and Sale of Assets................................. 1
1.2 Excluded Assets............................................. 5
1.3 Assumption of Liabilities................................... 7
Article II PAYMENT TO SELLER........................................... 8
2.1 Consideration for the Assets................................ 8
2.2 Allocation of the Purchase Price............................ 8
2.3 Adjustment to Purchase Price................................ 9
2.4 Apportionments for the Owned Real Property.................. 10
Article III THE CLOSING................................................. 11
3.1 Closing..................................................... 11
3.2 Delivery of Items by Seller................................. 11
3.3 Delivery of Items by Buyers................................. 13
3.4 Conditions to the Obligations of Buyers to Close............ 14
3.5 Conditions to the Obligations of Seller to Close............ 15
3.6 Effect of Closing........................................... 16
Article IV GENERAL REPRESENTATIONS AND WARRANTIES OF SELLER............ 16
4.1 Organization; Powers and Execution.......................... 16
4.2 Breach of Statute........................................... 16
4.3 Litigation.................................................. 17
4.4 Taxes....................................................... 17
4.5 Brokers..................................................... 17
4.6 Certain Inventory........................................... 17
4.7 Foreign Corrupt Practices Act............................... 17
4.8 Employee Information........................................ 17
4.9 Disclosure Schedule......................................... 18
4.10 EXCLUSIVITY OF REPRESENTATIONS.............................. 18
Article V REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT
TO THE RC INTERNATIONAL BUSINESS............................ 18
5.1 Good Standing of Seller; Powers............................. 18
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TABLE OF CONTENTS
(continued)
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5.2 Breach of RC International Material Assumed Contracts....... 19
5.3 RC International Litigation................................. 19
5.4 RC International Legal Compliance........................... 19
5.5 RC International Financial Statements....................... 19
5.6 Title to, Condition of and Location of the
RC International Assets..................................... 19
5.7 RC International Material Assumed Contracts................. 20
5.8 RC International Intellectual Property...................... 20
5.9 RC International Inventory.................................. 21
5.10 RC International Accounts Receivable........................ 21
5.11 RC International Labor Matters.............................. 21
5.12 RC International Customers.................................. 22
5.13 RC International Employee Plans............................. 22
5.14 RC International Insurance.................................. 22
Article VI REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT
TO THE COTT BUSINESS........................................ 23
6.1 Good Standing of Seller; Powers............................. 23
6.2 Breach of Cott Material Assumed Contracts................... 23
6.3 Cott Litigation............................................. 23
6.4 Cott Legal Compliance....................................... 23
6.5 Material Changes............................................ 23
6.6 Title to, Condition of and Location of the Cott Assets...... 23
6.7 Cott Material Assumed Contracts............................. 24
6.8 Cott Intellectual Property.................................. 24
6.9 Cott Inventory.............................................. 25
6.10 Cott Accounts Receivable.................................... 25
6.11 Cott Labor Matters.......................................... 25
6.12 Cott Employee Plans......................................... 26
6.13 Cott Insurance.............................................. 26
6.14 Owned Real Property......................................... 26
6.15 Environmental Matters....................................... 27
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TABLE OF CONTENTS
(continued)
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Article VII REPRESENTATIONS AND WARRANTIES OF BUYERS.................... 28
7.1 Organization and Good Standing of Buyers.................... 28
7.2 Powers; Execution........................................... 28
7.3 Breach of Statute or Contract............................... 28
7.4 No Litigation............................................... 28
7.5 Financial Ability........................................... 28
7.6 Breaches.................................................... 28
7.7 Brokers..................................................... 29
Article VIII INDEMNITIES................................................. 29
8.1 Survival.................................................... 29
8.2 General Indemnification by Seller........................... 29
8.3 General Indemnification by Cott............................. 31
8.4 Method of Asserting Claims.................................. 32
8.5 Exclusive Remedies.......................................... 34
8.6 Certain Adjustments......................................... 34
Article IX COVENANTS PENDING CLOSING................................... 35
9.1 Access to Information....................................... 35
9.2 Conduct of Business Pending Closing......................... 36
9.3 Reasonable Best Efforts..................................... 37
9.4 Public Announcements........................................ 38
9.5 Buyers...................................................... 38
9.6 Remediation Agreement....................................... 38
Article X TERMINATION................................................. 38
10.1 Termination................................................. 38
10.2 Effect of Termination....................................... 39
Article XI FURTHER COVENANTS........................................... 39
11.1 Confidentiality............................................. 39
11.2 Restrictive Covenants of Seller............................. 41
11.3 Restrictive Covenants of Cott............................... 42
11.4 Purchasers.................................................. 44
11.5 Remedies.................................................... 45
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TABLE OF CONTENTS
(continued)
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11.6 Employees................................................... 46
11.7 Mail and Other Communications............................... 48
11.8 Further Action.............................................. 48
11.9 Expenses and Finder's Fees.................................. 49
11.10 Accounts Receivable......................................... 50
11.11 Bulk Sales Laws............................................. 50
11.12 Interpretation.............................................. 50
Article XII GENERAL..................................................... 50
12.1 Certain Defined Terms....................................... 50
12.2 Waiver...................................................... 60
12.3 Notices..................................................... 61
12.4 No Third Party Beneficiaries................................ 61
12.5 Headings.................................................... 61
12.6 Entire Agreement............................................ 62
12.7 Severability................................................ 62
12.8 Assignability............................................... 62
12.9 Successors and Assigns...................................... 63
12.10 Governing Law............................................... 63
12.11 Counterparts................................................ 63
12.12 Consent to Jurisdiction..................................... 63
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LIST OF SCHEDULES
Schedule 1.1(a)(i)(A) RC International Marks
Schedule 1.1(a)(i)(C) RC International Websites
Schedule 1.1(a)(i)(D) RC International Customer List
Schedule 1.1(a)(iv) RC International Office Equipment
Schedule 1.1(a)(v) RC International Assumed Contracts
Schedule 1.1(b)(i)(A) Cott Marks
Schedule 1.1(b)(i)(B) Cott US Formulas
Schedule 1.1(b)(iv) Cott Equipment
Schedule 1.1(b)(v) Cott Assumed Contracts
Schedule 1.1(b)(vii) Description of Owned Real Property
Schedule 1.1(b)(viii) Cott Financial Information
Schedule 1.2(f) RC Domestic Formulas
Schedule 2.3(a) Working Capital Calculation
Schedule 2.3(b) Valuation Methods
Schedule 3.3(l) Agreements Subject to Joinder
Schedule 4.2(c) Consents of Governmental Authorities
Schedule 4.8 Transferred Employees
Schedule 5.2 Conflicts with RC International Material
Assumed Contracts
Schedule 5.3 RC International Litigation
Schedule 5.5(a) Division Performance Statement
Schedule 5.6(a) Exceptions to Title to RC International Assets
Schedule 5.7 RC International Material Assumed Contracts
Schedule 5.8 RC International Intellectual Property
Schedule 5.11(b) RC International Labor Matters
Schedule 5.12 RC International Customers
Schedule 5.13(a) RC International Employee Plans
Schedule 5.13(c) RC International Multiemployer Plans
Schedule 6.2 Conflicts with Cott Material Assumed Contracts
Schedule 6.3 Cott Litigation
Schedule 6.6(a) Exceptions to Title to Cott Assets
Schedule 6.7 Cott Material Assumed Contracts
Schedule 6.11(b) Cott Labor Matters
Schedule 6.12(a) Cott Employee Plans
Schedule 6.12(c) Cott Multiemployer Plans
Schedule 6.14(c) Condition of Owned Real Property
Schedule 6.15 Environmental Matters
Schedule 9.2 Conduct of Business Pending Closing
Schedule 11.3(a) Permitted Branded Carbonated Soft Drinks
Schedule 12.1 Permitted Encumbrances
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LIST OF EXHIBITS
Exhibit A Xxxx of Sale
Exhibit B Assumption Agreement
Exhibit C Trademark Assignment
Exhibit D Copyright Assignment
Exhibit E Termination Agreement
Exhibit F Transitional Services Agreement
Exhibit G Settlement Termination Agreement
Exhibit H Guaranty
Exhibit I Remediation Agreement Summary
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of June 13, 2001,
by and among Royal Crown Company, Inc., a Delaware corporation ("Seller"), and
Cott Corporation, a Canada corporation ("Cott") and BCB USA Corp., a Georgia
corporation ("BCB").
WHEREAS, Seller is in the business of (i) manufacturing and selling certain
concentrates, and emulsions used in the production of concentrates, which are
used in the manufacturing, marketing and selling in the Territory (as
hereinafter defined) of certain carbonated beverages under either the RC
International Current Marks (as hereinafter defined) or other bottler brand
marks and (ii) marketing certain carbonated beverages under the RC International
Current Marks (collectively, the "RC International Business");
WHEREAS, Seller is in the business of developing exclusively for, and
manufacturing and selling exclusively to, the Cott Group certain concentrates,
and emulsions used in the production of concentrates, which are used in the
production of Cott Products (as hereinafter defined) and providing quality
control services, including technical support, pursuant to the Cott Agreement
(as hereinafter defined) (the "Cott Business");
WHEREAS, Buyers desire to purchase from Seller and Seller desires to sell
to Buyers certain assets used in connection with the RC International Business
and certain assets used in connection with the Cott Business, which assets are
all further described below which include, in the case of the Cott Business,
without limitation, the Owned Real Property, and Seller desires to transfer to
Buyers and Buyers desire to assume from Seller certain liabilities in connection
with such assets, all upon the terms and conditions set forth in this Agreement;
WHEREAS, Buyers desire to purchase from Seller and Seller desires to sell
to Buyers the Cott Marks (as hereinafter defined), upon the terms and conditions
set forth in this Agreement; and
WHEREAS, capitalized terms used herein shall have the respective meanings
set forth in Section 12.1.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
Seller and Buyers hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS. On the terms and subject to the conditions
set forth in this Agreement, Seller shall sell, convey, transfer, assign, grant
and deliver to Buyers, and Buyers shall purchase, acquire and accept from Seller
at the Closing, Seller's right, title and interest in and to the following
specifically identified assets of Seller (collectively, the "Assets"), free and
clear of all liabilities, obligations, pledges, security interests, options,
rights of first refusal, rights of first
offer, liens, claims, encumbrances or charges of any nature (collectively,
"Encumbrances") other than Permitted Encumbrances:
(a) RC International Assets. (All items described in this Section 1.1(a),
collectively, the "RC International Assets").
(i) Intellectual Property. (All items described in this Section
1.1(a)(i), collectively, the "RC International Intellectual Property").
(A) The trademarks, trademark rights, trade dress, service marks,
service xxxx rights, brand names, trade names and trade name rights,
service names and service name rights, business and product names
currently used in the RC International Business marked with an "*" on
Schedule 1.1(a)(i)(A) and all bottle designs and molds therefor
currently used or developed exclusively in the RC International
Business (collectively, the "RC International Current Marks"), all
goodwill relating to the RC International Current Marks, all pending
applications for and registrations of any of the RC International
Current Marks and the right to xxx for past infringement or payment,
if any, in connection with the RC International Current Marks;
(B) The trademarks, trademark rights, trade dress, service marks,
service xxxx rights, brand names, trade names and trade name rights,
service names and service name rights not marked with an "*" on
Schedule 1.1(a)(i)(A) (collectively, the "RC International Additional
Marks" and, with the RC International Current Marks, the "RC
International Marks"), all goodwill relating to the RC International
Additional Marks, all pending applications for and registrations of
any of the RC International Additional Marks and the right to xxx for
past infringement or payment, if any, in connection with the RC
International Additional Marks;
(C) Those copyrightable materials (excluding the domain name
"xxxxxx.xxx") contained on the websites set forth on Schedule
1.1(a)(i)(C) (the "Websites") and the personal data collected from the
Websites, in each case which relate solely and exclusively to the RC
International Business;
(D) A list of all current distributors, customers, bottlers,
franchisees, licensees and brokers of the RC International Business as
set forth on Schedule 1.1(a)(i)(D), which shall be delivered in print,
magnetic medium or computer form, including names, addresses and
account details, as Seller and Cott shall agree;
(E) (i) All copyrightable materials, articles, typographical
arrangements, photographs, coupons and other printed materials used
solely in connection with the RC International Business and (ii) all
copyrights in and to the RC International Marks (the "RC International
Copyrights"), all pending applications for and registrations of any RC
International Copyrights and the right to xxx for past infringement or
payment, if any, in connection with the RC International Copyrights;
and
(F) Subject to Section 11.3(e), (i) the formulas used in the
production of the RC International Branded Concentrates (other than
those certain RC Domestic Formulas used in the production of the RC
International Branded Concentrates for the bottler in Trinidad) (the
"RC International Branded Formulas"), whether or not also used in the
RC Domestic Business and whether or not set forth on Schedule 1.2(f),
(ii) the formulas used in the production of the RC International
Non-Branded Concentrates (the "RC International Non-Branded
Formulas"), whether or not also used in the RC Domestic Business, and
(iii) the formulas currently in Seller's possession or under its
control and developed by Seller for use solely in the RC International
Business other than the RC International Branded Formulas and RC
International Non-Branded Formulas (the "RC International Additional
Formulas," and, together with the RC International Branded Formulas
and the RC International Non-Branded Formulas, the "RC International
Formulas"), together, in each of (i), (ii) and (iii), with all
inventions (whether patentable or not), processes, specifications,
technologies, methodologies, technical, manufacturing or engineering
information or other proprietary information and know-how, in each
case, exclusively related thereto (collectively, the "RC International
Formula Information").
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(ii) Licenses and Permits. To the extent transferable and assignable,
all rights of Seller in and to permits, licenses, approvals and
authorizations by or of Governmental Authorities relating solely to the RC
International Business.
(iii) Inventories and Supplies.
(A) All finished inventory of RC International Branded
Concentrates and RC International Non-Branded Concentrates exclusively
related to the RC International Business in the possession or control
of Seller wherever located;
(B) All labels, coupons, sales solicitation materials,
promotional materials and items, marketing materials, sales kits,
promotional publications, circulars, promotional lists, prospect
lists, direct mail materials and stationery, and all disks and other
media on which the foregoing are stored, in each case relating solely
to the RC International Business and in the possession or control of
Seller or its Affiliates or its manufacturers, agents or vendors;
(C) All raw materials, work in process and packaging materials,
in each case relating solely to the RC International Business and in
the possession or control of Seller wherever located; and
(D) 14% of all Common Inventory.
(iv) Office Equipment. The office equipment (excluding Information
Technology) located at the RC International Business's office in Ft.
Lauderdale, Florida, and used solely and exclusively in the RC
International Business as set forth on Schedule 1.1(a)(iv).
(v) Assumed Contracts. All of Seller's right, title, and interest in
and to the Contracts listed on Schedule 1.1(a)(v) and all other Contracts
to which Seller is a party or by which Seller or the RC International
Assets are bound that relate solely to the RC International Business
(exclusive of those which relate to the supply of materials for the
production of concentrates or emulsions by Seller) (collectively, the "RC
International Assumed Contracts"), in each case, to the extent such RC
International Assumed Contract is in effect as of the Closing, subject to
the provisions of Section 1.3(d).
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(vi) Accounts Receivable. All accounts receivable arising in the
conduct of the RC International Business outstanding as of the Closing
which are of the nature of the categories set forth in Schedule 2.3(a)
(collectively, the "RC International Accounts Receivable").
(vii) Accounting Information. An electronic file in such format as is
mutually acceptable to Seller and Cott which contains all reasonably
appropriate financial account balances to the extent that they relate to
the RC International Business which are reflected in the general ledger of
the RC International Business and other accounting books and records of
Seller, as well as all other books and records in the possession or under
the control of Seller, in each case, to the extent that they relate to the
RC International Business.
(viii) Memorabilia. All memorabilia materials of any nature (including
artwork, paintings, signs, plaques, prints, posters and statues) relating
solely to the RC International Business located at the Owned Real Property
or the RC International Business's office in Ft. Lauderdale, Florida.
(b) Cott Assets. (All items described in this Section 1.1(b), collectively,
the "Cott Assets").
(i) Intellectual Property. (All items described in this Section
1.1(b)(i), collectively, the "Cott Intellectual Property").
(A) The trademarks, trademark rights, trade dress, service marks,
service xxxx rights, brand names, trade names and trade name rights,
service names and service name rights, business and product names set
forth on Schedule 1.1(b)(i)(A) (collectively, the "Cott Marks"), all
goodwill relating to the Cott Marks, all pending applications for and
registrations of any of the Cott Marks and the right to xxx for past
infringement or payment, if any, in connection with the Cott Marks;
and
(B) (i) The formulas used in the production of the Cott Current
Concentrates (the "Cott Current Formulas") and (ii) the formulas
currently in Seller's possession or under its control and (x)
developed for use solely pursuant to the Cott Agreement to which
Seller has title to pursuant to the terms of the Cott Agreement or (y)
developed by either Seller or Cott or by Seller and Cott, jointly,
prior to the date of the Cott Agreement for use solely in the Cott
Business to which Seller or Seller and Cott, jointly, has title to
(the "Cott Additional Formulas") and (iii) the formulas set forth in
Schedule 1.1(b)(i)(B) (the "Cott US Formulas," and, together with the
Cott Current Formulas and the Cott Additional Formulas, the "Cott
Formulas") together, in the case of (i), (ii) and (iii) above, with
all inventions (whether patentable or not), processes, specifications,
technologies, methodologies, technical, manufacturing or engineering
information or other proprietary information and know-how exclusively
related thereto (collectively, the "Cott Formula Information").
(ii) Licenses and Permits. To the extent transferable and assignable,
all rights of Seller in and to permits, licenses, approvals and
authorizations by or of Governmental Authorities relating solely to the
Cott Business or the Owned Real Property.
(iii) Inventories and Supplies.
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(A) All finished inventory of Cott Current Concentrates in the
possession or under the control of Seller wherever located;
(B) All raw and packaging materials and work in process relating
solely to the Cott Business and in the possession or under the control
of Seller; and
(C) 56% of the Common Inventory (in addition to the percentage of
the Common Inventory set forth in Section 1.1(a)(iii)(D) above).
(iv) Equipment. All equipment located at the Owned Real Property as
set forth on Schedule 1.1(b)(iv), together with all manufacturing supplies,
parts and accessories related thereto at the Owned Real Property.
(v) Assumed Contracts. All of Seller's right, title, and interest in
and to (A) the Lutheran License and the Contracts listed on Schedule
1.1(b)(v) and (B) all other Contracts to which Seller is a party or by
which Seller or the Cott Assets are bound that relate solely to the Owned
Real Property (collectively, the "Cott Assumed Contracts"), in each case,
to the extent such Cott Assumed Contract is in effect as of the Closing,
subject to the provisions of Section 1.3(d).
(vi) Accounts Receivable. All accounts receivable arising in
connection with the Cott Business outstanding as of the Closing other than
under the Cott Agreement (collectively, the "Cott Accounts Receivable").
(vii) Real Property. All of Seller's right, title and interest in and
to the Real Property located in the City of Columbus, Muscogee County,
Georgia and more fully described on Schedule 1.1(b)(vii) (the "Owned Real
Property").
(viii) Information. The financial information with respect to the Cott
Business set forth in Schedule 1.1(b)(viii) and all other books and records
in the possession or under the control of Seller to the extent that they
relate to the Owned Real Property.
No later than fifteen (15) Business Days immediately following the Closing Date,
(i) all tangible property constituting Assets, including, without limitation,
books and records that are in the possession or under the control of Seller or
its Affiliates at a location other than the Owned Real Property or at the RC
International Business's office in Ft. Lauderdale shall be delivered by Seller
or its Affiliates, at Seller's sole cost and expense, to Cott at the Owned Real
Property or, at Cott's sole cost and expense, any location other than the Owned
Real Property, and (ii) Seller shall notify in writing each of its
manufacturers, agents and vendors who have possession of any tangible property
constituting Assets that such tangible property has been purchased by the
applicable Buyer.
1.2 EXCLUDED ASSETS. All assets of Seller or its Affiliates not
specifically identified above, whether or not used in connection with the RC
International Business or the Cott Business, are not included in the Assets and
shall be retained by Seller or its Affiliates (the "Excluded Assets") which
shall include, without limitation:
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(a) Cash and Cash Equivalents. Cash and cash equivalents, including all
bank accounts (provided that all cash assets solely related to the RC
International Business or the Cott Business that come into the possession of
Seller or any of its Affiliates after the Closing and that relate to events
after the Closing or that are proceeds of payment of RC International Accounts
Receivable or Cott Accounts Receivable shall constitute Assets and shall
promptly be turned over to Cott).
(b) Contracts. All of Seller's or its Affiliate's right, title and interest
in and to any Contract other than an Assumed Contract, including, without
limitation, the Cott Agreement (including all amounts due thereunder), the Fort
Lauderdale Lease, Contracts relating to the supply of materials for the
production of concentrates or emulsions by Seller and Contracts relating solely
to the RC Domestic Business.
(c) Website Data. All of Seller's or its Affiliates' right, title and
interest in and to personal data collected from the Websites other than as
specified in Section 1.1(a)(i)(C).
(d) Inventory.
(i) All finished concentrates not constituting RC International
Branded Concentrates or RC International Non-Branded Concentrates, in each
case as specified in Section 1.1(a)(iii)(A), or Cott Current Concentrates
and all raw materials, work in process, manufacturing supplies, parts,
packaging materials and other accessories related thereto, in each case
used or held for use by or on behalf of Seller solely in connection with
the RC Domestic Business, in any case, wherever located.
(ii) 30% of the Common Inventory.
(e) Information Technology. Except as set forth on Schedule 1.1(a)(iv) or
Schedule 1.1(b)(iv), all of Seller's and its Affiliates' rights in any and all
licensed or proprietary telephone systems, computer software, firmware,
middleware, programs, development tools, data, databases and data collections,
applications and files (in whatever form or medium) including all source and
object code relating thereto, all computer hardware, including, without
limitation, all cables, connectors, power supply units and peripheral devices
(including all servers, printers, scanners) used in connection therewith and all
documentation relating to any of the foregoing, however used, including, without
limitation, in payroll, accounting, billing/receivables, purchasing/payables,
inventory, asset tracking, customer service, human resources or e-mail systems
and, in each case, whether or not used in the RC International Business or the
Cott Business (collectively, "Information Technology").
(f) Intellectual Property. The formulas currently in commercial use in the
RC Domestic Business (the "RC Domestic Formulas"), whether or not also used in
the RC International Business (but, if used in the RC International Business,
subject to Section 11.3(e)), and the formulas developed for the RC Domestic
Business, with such formulas and the RC Domestic Formulas to include, without
limitation, those set forth on Schedule 1.2(f), or any other business of Seller
or any of its Affiliates together with all inventions (whether patentable or
not), processes, specifications, technologies, methodologies, technical,
manufacturing or engineering information or other proprietary information and
know-how, in each case, exclusively related
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thereto (such inventions and other such processes and information solely with
respect to the RC Domestic Formulas being, collectively, the "RC Domestic
Formula Information").
(g) Memorabilia. All memorabilia materials of any nature (including
artwork, paintings, signs, plaques, prints, posters and statues) relating to the
RC Domestic Business or any other business of Seller or its Affiliates wherever
located, including, without limitation, those at the Owned Real Property or the
RC International Business's office in Ft. Lauderdale, Florida.
(h) Agreement. All of Seller's right, title and interest in and to this
Agreement.
1.3 ASSUMPTION OF LIABILITIES.
(a) On the terms and subject to the conditions of this Agreement, each
applicable Buyer shall assume and discharge (i) the obligation for performance
due by Seller after the Closing Date under the applicable Assumed Contracts
(other than with respect to any breach thereof caused by any act or failure to
act by Seller or any predecessor in interest of Seller prior to or on the
Closing Date), (ii) any and all obligations, including, without limitation, all
accounts payable, accrued liabilities and other amounts payable to third
parties, related to or arising out of the RC International Business or the Cott
Business and incurred in the ordinary course of business, outstanding as of the
Closing Date or arising thereafter, but, solely, with respect to any of the
foregoing items described in this clause (ii) outstanding as of the Closing
Date, of the nature of the categories set forth in Schedule 2.3(a); provided,
however, that, except as provided in Section 11.9, none of the Buyers shall be
liable for any Taxes of Seller which accrued with respect to any time period on
or prior to the Closing Date or income Taxes that arise from the transactions
contemplated hereby and (iii) any and all liabilities or obligations of the
Buyers arising out of, related to or on account of their use of the Assets after
the Closing Date (collectively, the "Assumed Liabilities").
(b) Except as expressly provided in Section 1.3(a), Section 11.6 and
Section 11.9, Buyers assume no liabilities or obligations relating to the RC
International Business, the Cott Business or the Assets. Except for the Assumed
Liabilities, Buyers shall not assume by virtue of this Agreement or the
transactions contemplated hereby, and shall not have liability for, any other
liabilities or obligations of Seller or any of its Affiliates of any kind,
character or description whatsoever, including, without limitation, any
liabilities for Taxes related to or arising out of the RC International Business
or the Cott Business accruing with respect to any time period occurring on or
prior to the Closing Date (the "Retained Liabilities"). Seller or its Affiliates
shall discharge in a timely manner all of the Retained Liabilities, provided,
however, that Seller or its Affiliates shall have the ability to contest, in
good faith, any such claim or liability asserted in respect thereof by any
Person other than Buyers or their Affiliates (exclusive of disputes with respect
to Retained Liabilities arising out of transactions between Seller and any Buyer
or its Affiliates other than those contemplated by this Agreement), so long as
such party's contest of any such claim does not result in an Encumbrance against
Buyers or their Affiliates or any of their respective assets and properties;
provided, further, that Buyers' agreement to permit Seller to exercise the
rights described in the foregoing proviso does not constitute an acknowledgement
by Buyers that any such claims are not indemnifiable claims subject to Article
VIII hereof.
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(c) For greater certainty, none of the representations and warranties of
Seller contained in this Agreement shall be referred to in any way to determine
what constitutes a Retained Liability or to limit the rights of any Buyer or the
rights or obligations of Seller contained in this Agreement in connection with
the Retained Liabilities.
(d) Notwithstanding anything to the contrary contained herein, neither this
Agreement nor any other agreement referenced herein shall constitute an
assignment of any Contract or right or benefit arising thereunder included in
the Assets if such assignment would constitute a breach thereunder. In the event
that Seller does not obtain any consent or waiver for the transfer of any
Assumed Contract to the applicable Buyer (to the extent required by the terms of
any such Assumed Contract) prior to the Closing, Seller shall hold such Assumed
Contract in trust for and for the benefit of such Buyer. Seller and Cott shall
continue to use their respective reasonable best efforts to obtain such consent
or waiver and shall use their respective reasonable best efforts after the
Closing to keep such Assumed Contract in effect for the benefit of the
appropriate Buyer until such consent or waiver is obtained, including
enforcement by Seller of such Assumed Contract, at the cost and for the account
of Cott, of any and all rights of Seller against any other party to such Assumed
Contract arising out of the breach, nonfulfillment or cancellation thereof by
such other party or otherwise for the benefit of the applicable Buyer.
ARTICLE II
PAYMENT TO SELLER
2.1 CONSIDERATION FOR THE ASSETS. On the terms and subject to the
conditions of this Agreement, in consideration of the sale, conveyance,
transfer, assignment, grant and delivery of the Assets to Buyers, Cott shall pay
to Seller the sum of Ninety-Four Million Dollars ($94,000,000) (the "Purchase
Price"). The Purchase Price shall be paid and delivered to Seller at the Closing
by wire transfer of immediately available funds to the account designated by
Seller to Cott in writing at least two (2) Business Days prior to the Closing.
2.2 ALLOCATION OF THE PURCHASE PRICE. The Purchase Price, plus the amount
of Assumed Liabilities required to be included in consideration received
pursuant to Section 1060 of the Code, shall be allocated for all purposes
(including, without limitation, Tax purposes) in accordance with the
requirements of Section 1060 of the Code. The allocation of the Purchase Price
shall be as mutually agreed in writing between Cott and Seller no later than
five (5) Business Days prior to the Closing (the "Allocation Schedule"). Seller
and Cott recognize that the Purchase Price does not include the Assumed
Liabilities required to be treated as purchase consideration for U.S. federal
income tax purposes and that Cott will allocate such Assumed Liabilities
appropriately and shall advise Seller of such allocation and the Allocation
Schedule shall be revised accordingly. The Allocation Schedule shall be subject
to adjustment as provided in Sections 2.3 and 2.4 below. Seller and Buyers agree
(i) to act in accordance with the computations and allocations contained in the
Allocation Schedule (including Cott's allocation of Assumed Liabilities and any
modifications thereto reflecting any post-closing adjustments) in all
appropriate Tax forms for the tax year in which the Closing occurs and (ii) not
to take a position on any Tax return before any Governmental Authority charged
with the collection of any Tax or in any judicial proceeding that is in any
manner inconsistent with the terms of any such allocation (including Cott's
allocation of Assumed Liabilities and any modifications thereto
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reflecting any post-closing adjustments) without the consent of Cott, in the
case of Seller, and Seller, in the case of any Buyer. In the event that any
Taxing authority disputes the allocation as indicated on the Allocation Schedule
(including Cott's allocation of Assumed Liabilities and any modifications
thereto reflecting any post-closing adjustments), the party receiving notice of
the dispute shall promptly notify the other party hereto concerning resolutions
of the dispute.
2.3 ADJUSTMENT TO PURCHASE PRICE.
(a) No later than sixty (60) calendar days following the Closing, Seller
shall prepare and deliver to Cott a statement, certified by Seller's Chief
Financial Officer, of the working capital of the RC International Business and
the Cott Business, being Inventory, RC International Accounts Receivable and
Cott Accounts Receivable net of (i) payables, (ii) accrued liabilities and (iii)
other liabilities, which, in the case of (i), (ii) and (iii) are of the nature
of the categories set forth in Schedule 2.3(a), and which are related to or
arise out of the RC International Business or the Cott Business (the "Working
Capital"), as of the close of business on the Closing Date (the "Initial Working
Capital Statement"), which shall set forth in detail the amounts underlying
Seller's determination of the dollar value of the Working Capital. For purposes
of this Section 2.3, the value of the components comprising Working Capital
shall be determined as set forth in the notes to Schedule 2.3(a) and as set
forth in Schedule 2.3(b).
(b) Cott shall notify Seller in writing (the "Notice of Disagreement")
within thirty (30) days after receiving the Initial Working Capital Statement if
Cott disagrees with Seller's calculation of the value of the Working Capital as
of the close of business on the Closing Date which Notice of Disagreement shall
set forth in reasonable detail the basis for such dispute and the U.S. dollar
amounts involved and Cott's good faith estimate of the value of the Working
Capital as of the close of business on the Closing Date. If Cott does not
deliver a Notice of Disagreement to Seller within such thirty-day period, then
the Initial Working Capital Statement shall be deemed to have been accepted by
Buyers, shall become final and binding upon the parties and shall be the "Final
Working Capital Statement."
(c) During the fifteen (15) Business Days immediately following the
delivery of a Notice of Disagreement, Seller and Cott shall seek in good faith
to resolve any differences that they may have with respect to any matter
specified in the Notice of Disagreement. If at the end of such fifteen (15)
Business Day period Seller and Cott have been unable to agree upon the valuation
of the Working Capital, then Seller and Cott shall submit to the Independent
Accounting Firm for review and resolution any and all matters that remain in
dispute with respect to the Notice of Disagreement. Cott and Seller shall use
their reasonable efforts to cause the Independent Accounting Firm to use
commercially practicable efforts to make a final determination (which
determination shall be binding on the parties hereto) of the value of the
Working Capital as of the close of business on the Closing Date within fifteen
(15) Business Days from such submission, and such final determination shall be
the "Final Working Capital Statement." The cost of the Independent Accounting
Firm's review and determination shall be split equally between Seller and Cott.
During the fifteen (15) Business Day review by the Independent Accounting Firm,
Cott and Seller will each make available to the Independent Accounting Firm
interviews with such individuals and such information, books and records as may
be reasonably required by the Independent Accounting Firm to make its final
determination.
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(d) If the value of the Working Capital as of the close of business on the
Closing Date (as set forth in the Final Working Capital Statement) is less than
$8.7 million, Seller shall pay to Cott the amount of such shortfall plus
interest at the Agreed Rate calculated from the Closing Date to the date of
payment as provided in this Section 2.3. If the value of the Working Capital as
of the close of business on the Closing Date (as set forth in the Final Working
Capital Statement) is greater than $8.7 million, Cott shall pay to Seller the
amount of such surplus plus interest at the Agreed Rate calculated from the
Closing Date to the date of payment as provided in this Section 2.3. Within five
(5) Business Days after the Final Working Capital Statement becomes final and
binding on the parties hereto, Cott or Seller, as applicable, shall pay to the
other the amounts provided by this Section 2.3(d). The allocation set forth on
the Allocation Schedule shall be adjusted to reflect any payments made pursuant
to this Section 2.3.
(e) Any payment due to either Seller or Cott hereunder shall be paid as
soon as practicable on the day when due in U.S. dollars by wire transfer in
immediately available funds. All computations of interest shall be made assuming
an annual rate of 8% (the "Agreed Rate") on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.
Whenever any payment hereunder shall fall on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest.
2.4 APPORTIONMENTS FOR THE OWNED REAL PROPERTY.
(a) The following are to be apportioned between Seller and the applicable
Buyer with respect to the Owned Real Property as of the Closing Date as set
forth below:
(i) Real estate Taxes and assessments on the basis of the fiscal year
for which assessed;
(ii) Water and sewer charges on the basis of the fiscal year for which
assessed, unless the meters are read on the Closing Date;
(iii) Utilities, including, without limitation, telephone, electricity
(and any sales Tax thereon) and gas, on the basis of the most recently
issued bills therefor; unless the meters are read on the Closing Date;
(iv) Fees for governmental permits to the extent actually transferred;
and
(v) Fuel (including any sales Tax thereon), based on a reading and the
current price therefor; and
(vi) Any other adjustments that are customarily made in the transfer
of real property.
All of the foregoing fees and assessments that relate to the period ending on
the Closing Date shall be apportioned to Seller. All of the foregoing fees and
assessments that relate to the period beginning after the Closing Date shall be
apportioned to the applicable Buyer. Cott shall
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reimburse Seller for any payments made by Seller in respect of any of the
foregoing fees and assessments for the period beginning after the Closing Date.
(b) Except as otherwise provided in this Agreement, the apportionments made
pursuant to this Section 2.4 shall be made in accordance with the customs in
respect to title closings in the jurisdiction where the Owned Real Property is
located.
(c) Any errors in calculations or apportionments made pursuant to this
Section 2.4 shall be corrected or adjusted as soon as practicable after the
Closing.
(d) If the Closing shall occur before the Tax rate is fixed, the
apportionment of real estate Taxes made pursuant to this Section 2.4 shall be
upon the basis of the Tax rate for the next preceding year applied to the latest
assessed valuation, subject to further and final adjustment when the Tax rate is
fixed for the year in which the Closing takes place.
(e) The allocation set forth on the Allocation Schedule shall be adjusted
to reflect all allocations made pursuant to this Section 2.4.
ARTICLE III
THE CLOSING
3.1 CLOSING. The closing of the purchase and sale of the Assets hereunder
(the "Closing") shall take place on such date as the parties shall agree (the
"Closing Date"), but in no event later than the date specified in Section
10.1(b). The Closing shall take place at the offices of Xxxxxx, Xxxxx & Xxxxxxx
LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Closing shall be effective
as of the close of business on the Closing Date.
3.2 DELIVERY OF ITEMS BY SELLER. Seller shall deliver to Buyers at the
Closing the items listed below:
(a) a copy, certified by the Secretary of Seller, of resolutions duly
adopted by the Board of Directors of Seller authorizing the execution, delivery
and performance of this Agreement and the transactions contemplated herein, and
a certificate of incumbency for the officers of Seller executing this Agreement
and any Ancillary Agreement, duly certified by the Secretary of Seller;
(b) (i) a certificate, duly executed by an authorized officer of Seller,
certifying that (A) all representations and warranties of Seller under this
Agreement are true and correct in all material respects as of the Closing,
except that representations and warranties made as of a specific date need only
be true as of such specified date and (B) all covenants and agreements of Seller
required to be performed prior to the Closing under this Agreement have been
performed in all material respects and (ii) a current Certificate of Good
Standing of Seller issued by the Delaware Secretary of State;
(c) a Xxxx of Sale and Assignment (the "Xxxx of Sale") for the Assets, duly
executed by Seller, in the form attached hereto as Exhibit A;
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(d) an Assumption Agreement (the "Assumption Agreement") for the Assumed
Liabilities, duly executed by Seller, in the form attached hereto as Exhibit B;
(e) a Trademark Assignment (the "Trademark Assignment") for the Marks, duly
executed by Seller, in the form attached hereto as Exhibit C, together with an
original of the Trademark Assignment transferring the Cott Marks to Seller;
(f) a Copyright Assignment (the "Copyright Assignment") for the RC
International Copyrights, duly executed by Seller, in the form attached hereto
as Exhibit D;
(g) a Termination Agreement (the "Termination Agreement") terminating the
Cott Agreement, duly executed by Seller, in the form attached hereto as Exhibit
E, together with a payment by wire transfer from Seller to Cott as settlement of
all payments due Cott under the Cott Agreement;
(h) a Limited Warranty Deed (the "Deed") for the Owned Real Property, duly
executed by Seller, in a form reasonably acceptable to Seller and Cott;
(i) a properly executed and completed certification from Seller as to
Seller's non-foreign status under Section 1.1445-2(b) of the Code (the "FIRPTA
Certificate");
(j) a Transitional Services Agreement (the "Transitional Services
Agreement") for the supply of concentrates, raw materials and other services,
duly executed by Seller, in the form attached hereto as Exhibit F; and
(k) an opinion of Xxxxxx Xxxxx & Bockius LLP, on such matters, excluding
title and conveyance of title matters, as is reasonably acceptable to counsels
for Seller and Cott;
(l) a Settlement Termination Agreement (the "Settlement Termination
Agreement") with respect to the Cott Settlement Agreement, duly executed by
Seller and CBI Holdings, Inc., in the form attached hereto as Exhibit G;
(m) a License Assignment Agreement (the "License Assignment Agreement")
assigning the Cott USA Trademark License Agreement to the applicable Buyer, duly
executed by Seller or its applicable Affiliate, in a form reasonably acceptable
to Seller and Cott;
(n) a Guaranty (the "Guaranty"), in the form attached hereto as Exhibit H,
duly executed by Xx Xxxxxx/Seven Up, Inc.;
(o) a License Agreement (the "License Agreement"), granting the applicable
Buyer a perpetual, royalty-free license, freely assignable in connection with a
sale of the RC International Business, with respect to all copyrightable
materials, articles, typographical arrangements, photographs, coupons and other
printed materials used in connection with both the RC International Business and
the RC Domestic Business (whether contained on the Websites or otherwise), in a
form reasonably acceptable to Seller and Cott, and duly executed by Seller or
its applicable Affiliate; and
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(p) such other documents and instruments as Cott and its counsel may
reasonably request.
3.3 DELIVERY OF ITEMS BY BUYERS. Buyers shall deliver to Seller at the
Closing the items listed below:
(a) a copy, certified by the Secretary of each Buyer, of resolutions duly
adopted by the Board of Directors of such Buyer authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated
herein, and a certificate of incumbency for the officers of each Buyer executing
this Agreement and any Ancillary Agreement, duly certified by the Secretary of
such Buyer;
(b) (i) a certificate, duly executed by an authorized officer of each
Buyer, certifying that (A) all representations and warranties of such Buyer
under this Agreement are true and correct in all material respects as of the
Closing, except that representations and warranties made as of a specific date
need only be true as of such specified date and (B) all covenants and agreements
of such Buyer required to be performed prior to the Closing under this Agreement
have been performed in all material respects and (ii) a current Certificate of
Good Standing of such Buyer issued by the jurisdiction of its organization;
(c) the Assumption Agreement, duly executed by the appropriate Buyer;
(d) the Trademark Assignment, duly executed by the appropriate Buyer;
(e) the Copyright Assignment, duly executed by the appropriate Buyer;
(f) the Termination Agreement, duly executed by Cott, together with a
payment by wire transfer from Cott to Seller as settlement of all outstanding
payments due Seller under the Cott Agreement;
(g) the Deed, duly executed by the appropriate Buyer, if required;
(h) the Transitional Services Agreement, duly executed by the appropriate
Buyer;
(i) opinions by each of Goodmans LLP and Drinker Xxxxxx & Xxxxx LLP, on
such matters as are reasonably acceptable to each such counsel, respectively,
and counsel to Seller;
(j) the Settlement Termination Agreement, duly executed by Cott and BCB USA
Corp. (f/k/a Cott Beverages USA, Inc.);
(k) the License Assignment Agreement, duly executed by the applicable
Buyer;
(l) joinder agreements (collectively, the "Joinder Agreements"), in such
form as are reasonably acceptable to Seller and Cott, to the agreements listed
on Schedule 3.3(l), duly executed by the appropriate Buyer;
(m) the License Agreement, duly executed by the applicable Buyer;
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(n) a wire transfer of immediately available funds to Seller constituting
payment of the Purchase Price; and
(o) such other documents and instruments as Seller and its counsel may
reasonably request.
3.4 CONDITIONS TO THE OBLIGATIONS OF BUYERS TO CLOSE. The obligations of
Buyers to close hereunder shall be subject to fulfillment prior to the Closing
of the following conditions unless waived by Cott:
(a) Each of the representations and warranties of Seller made in or
pursuant to this Agreement shall be true and correct in all material respects as
of the Closing Date, except that such representations and warranties made as of
a specific date need only be true as of such specified date, and each of the
covenants and agreements of Seller to be performed on or prior to the Closing
Date shall have been duly performed in all material respects;
(b) There shall be no Order by a Governmental Authority in existence that
expressly prohibits any of the transactions contemplated by this Agreement;
(c) Seller shall have delivered duly executed copies of the Xxxx of Sale,
Assumption Agreement, Trademark Assignment, Copyright Assignment, Termination
Agreement, Deed, FIRPTA Certificate, Transitional Services Agreement, Settlement
Termination Agreement, License Assignment Agreement, Guaranty, License
Agreement, Remediation Agreement and all other Closing deliveries contemplated
by Section 3.2;
(d) From June 6, 2001, through the Closing Date, there shall not have been
any loss of or damage to assets at the Owned Real Property except (i) if the
loss or damage is $250,000 or less and is covered by insurance with the proceeds
actually received by Seller prior to Closing from such loss or damage having
been used to repair or replace such asset or having been paid to Cott or, if not
received prior to Closing, having been irrevocably and unconditionally assigned
to Cott or (ii) if the loss or damage is in excess of $250,000 but equal to or
less than $1 million, and is covered by any combination of insurance or Seller's
funds to the extent of the full replacement value of such assets (with the
insurance proceeds from such loss received by Seller prior to Closing, together
with its own funds, having been used to repair or replace such assets or having
been paid to Cott or, if the insurance portion has not been received prior to
the Closing, having been irrevocably and unconditionally assigned to Cott);
(e) From the date hereof through the Closing Date, there shall not have
been any material loss of the employees employed at the Owned Real Property as
indicated on Schedule 4.8, other than Xxxxx XxXxxxxxx and Xxxx Xxxxxxxx;
(f) The Phase II shall have been received by Cott and the Environmental
Remedial Costs shall not be in excess of $20 million;
(g) There shall be no Order by a Governmental Authority that expressly
prohibits or affects (i) the use of the RC International Assets by the
applicable Buyers that has an RC International MAE or (ii) the use of the Cott
Assets by the applicable Buyers that has a Cott MAE;
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(h) Cott shall have obtained a survey of the Owned Real Property depicting
the following items to the reasonable satisfaction of Cott: (i) the lines and
corners of the Owned Real Property and a metes and bounds description of the
Owned Real Property substantially similar to and consistent with the description
thereof contained in Schedule 1.1(b)(vii); (ii) the location of all buildings
improvements, structures, plottable easements, fences, utility poles, meters,
and parking areas are within the boundaries and setbacks of the Owned Real
Property, and that there are no encroachments by or upon the Owned Real Property
except those which in the reasonable discretion of Cott do not materially
interfere with or otherwise materially adversely affect the use and enjoyment of
the Owned Real Property consistent with past practice; (iii) the location of any
building setbacks or other plottable restrictive covenants affecting the
location of any improvements, and any violations thereof; and (iv) access to
public streets sufficient for the existing use, consistent with past practice;
(i) Cott shall have obtained a title insurance policy from any reputable
title insurance company licensed in the State of Georgia insuring the applicable
Buyer's fee title to the Owned Real Property free and clear of all matters other
than Permitted Encumbrances for an amount that is not greater than 150% of the
current fair market value of the Owned Real Property;
(j) Cott shall have obtained the Financing on substantially the terms and
conditions set forth in the Commitment Letter or on terms substantially similar
thereto from any other lender reasonably acceptable to Cott; provided, however,
that the failure to fulfill this condition shall not have occurred as a result
of or arising out of the failure by Cott or any of its Affiliates to satisfy the
terms of Section 9.3 hereto in so far as they relate to the Financing; and
(k) Seller shall have either obtained a UCC-3 termination statement of the
UCC-1 filed by the Bank of New York in the State of Florida against the Seller
or provided Cott with evidence, reasonably satisfactory to Cott, of the release
of the Encumbrances evidenced by such UCC-1.
3.5 CONDITIONS TO THE OBLIGATIONS OF SELLER TO CLOSE. The obligations of
Seller to close hereunder shall be subject to fulfillment prior to the Closing
of the following conditions unless waived by Seller:
(a) Each of the representations and warranties of Buyers made in or
pursuant to this Agreement shall be true and correct in all material respects as
of the Closing Date, except that such representations and warranties made as of
a specific date need only be true as of such specified date, and each of the
covenants and agreements of Buyers to be performed on or prior to Closing shall
have been duly performed in all material respects;
(b) There shall be no Order by a Governmental Authority in existence that
expressly prohibits any of the transactions contemplated by this Agreement;
(c) Buyers shall have delivered duly executed copies of the Assumption
Agreement, Trademark Assignment, Copyright Assignment, Termination Agreement,
Deed, Transitional Services Agreement, Settlement Termination Agreement, License
Assignment Agreement, Joinder Agreements, License Agreement, Remediation
Agreement and all other Closing deliveries contemplated by Section 3.3;
15
(d) Cott shall have obtained a title insurance policy from any reputable
title insurance company licensed in the State of Georgia insuring the applicable
Buyer's fee title to the Owned Real Property free and clear of all matters other
than Permitted Encumbrances for an amount that is not greater than 150% of the
current fair market value of the Owned Real Property; and
(e) The Phase II shall have been received by Seller and the Environmental
Remedial Costs shall not be in excess of $3 million.
3.6 EFFECT OF CLOSING. Each condition set forth in this Article III shall
be deemed to have been waived or satisfied in the event the Closing occurs;
provided, however, that subject to the foregoing, no party's rights or remedies
hereunder, including, without limitation, in connection with any breach of any
representation, warranty or covenant by the other parties hereto on or prior to
the Closing Date shall be prejudiced by the occurrence of the Closing.
ARTICLE IV
GENERAL REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Cott and, if applicable, all other
Buyers as follows:
4.1 ORGANIZATION; POWERS AND EXECUTION. Seller is a corporation, duly
organized, validly existing and in corporate good standing under the laws of
Delaware. Seller has all requisite corporate power and authority to execute,
deliver and perform this Agreement and all other Ancillary Agreements to be
executed and delivered by Seller pursuant to this Agreement. The execution and
delivery by Seller of this Agreement and the Ancillary Agreements have been duly
and validly authorized by all necessary corporate action on the part of Seller.
This Agreement is, and this Agreement and the Ancillary Agreements will be as of
the Closing, validly executed and delivered, and the valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms.
4.2 BREACH OF STATUTE. Neither the execution and delivery of this Agreement
or the Ancillary Agreements by Seller nor performance by Seller of any of its
obligations under this Agreement or the Ancillary Agreements or the consummation
of the transactions contemplated hereby or thereby (a) will violate any
provision of the Certificate of Incorporation or By-Laws of Seller, (b) will
violate in any respect any Law applicable to Seller or the Assets or (c) except
for the expiration or early termination of the waiting period under the HSR Act
and except as set forth on Schedule 4.2(c), requires in respect of Seller or the
Assets any approval from, consent of or notice to any Governmental Authority
other than, in the case of clauses (b) and (c), any conflict, breach or
violation that, individually or in the aggregate, would not (x) have an RC
International MAE, (y) have a Cott MAE or (z) materially impair or delay the
ability of Seller to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby.
4.3 LITIGATION. There is no pending or, to the Knowledge of Seller,
threatened in writing, litigation, judicial, administrative or arbitral action,
proceeding or claim (collectively,
16
"Litigation") that, individually or in the aggregate, would impair or delay the
ability of Seller to perform its obligations under this Agreement or to
consummate the transactions contemplated by this Agreement.
4.4 TAXES. From and after October 25, 2000, Seller has timely filed or been
included in, or will timely file or be included in, all material Tax Returns
required to be filed by it or in which it is to be included with respect to
Taxes for any taxable period beginning on or after October 25, 2000 and ending
on or before the Closing Date. All of the information provided by Seller in any
of such material Tax Returns is true, complete and correct in all material
respects. All Taxes shown to be payable on such material Tax Returns have been
paid or will be paid except to the extent that the same are being contested in
good faith. Seller has complied in all material respects with all applicable
payroll tax and withholding requirements applicable to the RC International
Business and to the Cott Business. Other than Permitted Encumbrances, there are
no Encumbrances existing, threatened in writing or pending on the Assets on
account of Taxes for any taxable period beginning on or after October 25, 2000.
4.5 BROKERS. Except for Xxxxxxxx Xxxxxxx Xxxxx Xxxxxx or an Affiliate
thereof, whose fees will be paid by Seller, there is no investment banker,
broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of Seller who might be entitled to any fee or commission from
Seller or any of the Buyers in connection with the transactions contemplated by
this Agreement.
4.6 CERTAIN INVENTORY. The amount of Common Inventory included in the
Assets is reasonably sufficient to operate the RC International Business and the
Cott Business, on a combined basis, in each individual case as currently
conducted by Seller and in compliance with the applicable Contracts listed on
Schedule 1.1(a)(v) and the Cott Agreement, as applicable, without disruption.
4.7 FOREIGN CORRUPT PRACTICES ACT. To the Knowledge of Seller, no director,
officer or employee of Seller employed in the RC International Business has (i)
made any direct or indirect unlawful payment to any official or employee of a
Governmental Authority from Seller's corporate funds or (ii) materially violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or the
anti-boycott provisions contained in 50 USC ss. 2407, 15 CFR 760.2 or Section
999 of the Code.
4.8 EMPLOYEE INFORMATION. With respect to employees employed by Seller and
located at the Owned Real Property, prior to the date hereof, Seller has
provided Cott and with respect to employees employed by Seller and engaged in
the RC International Business, Seller will provide Cott as soon as practicable
after the date hereof, but in no event later than ten (10) Business Days prior
to the Closing, with a true and complete list showing the names, titles and
current annual rates of salaries and other remuneration (including sick and
vacation leave that is accrued but unused and service credited for purposes of
vesting and eligibility to participate under any RC International Employee Plan
or Cott Employee Plan applicable to such person) of all such employees,
including in each case those employees on vacation, leave of absence, disability
(work-related or otherwise) or sick leave (whether or not such employees return
to active employment) (collectively, the "Employees"), in each case as of the
date of such list. Schedule 4.8 sets forth a true and complete list of the names
of the Employees employed by
17
Seller in the RC International Business or at the Owned Real Property as of the
date hereof, which Schedule shall be updated by Seller on the day prior to the
Closing.
4.9 DISCLOSURE SCHEDULE. The Schedules attached hereto (collectively, the
"Disclosure Schedule") set forth, among other things, items of disclosure
relating to any or all of the representations and warranties of Seller;
provided, that the mere inclusion of an item in the Disclosure Schedule shall
not be deemed an admission by Seller that such item represents a material
exception or fact, event or circumstance or that such item would result in an RC
International MAE or a Cott MAE.
4.10 EXCLUSIVITY OF REPRESENTATIONS.
(a) THE REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN ARTICLES IV, V AND
VI OF THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES. SELLER HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR
WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO COTT OR ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).
(b) Buyers acknowledge that the representations and warranties contained in
Sections 5.4, 5.5(b), 5.8(c), 5.13(b), 6.4, 6.5, 6.8(c), 6.11(a) and 6.12(b)
shall be deemed not to include any representation or warranty by Seller with
respect to any Tax matters relating to the RC International Assets or the RC
International Business or the Cott Business or the Cott Assets.
(c) Buyers acknowledge that the representations and warranties contained in
Sections 5.4 and 6.4 shall be deemed not to include any representation or
warranty by Seller with respect to the RC International Intellectual Property or
the Cott Intellectual Property.
(d) Buyers acknowledge that the representations and warranties contained in
Sections 5.4, 5.5(b), 6.4, 6.5, 6.14(b) and 6.14(c) shall be deemed not to
include any representation or warranty by Seller with respect to any
environmental matter or condition relating to the RC International Assets or the
RC International Business or the Cott Assets or the Cott Business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
SELLER WITH RESPECT TO THE RC INTERNATIONAL BUSINESS
Seller hereby represents and warrants to Cott and, if applicable, all other
Buyers as follows:
5.1 GOOD STANDING OF SELLER; POWERS. Seller is registered or qualified to
do business and is in good standing in every jurisdiction in which it conducts
the RC International Business, except where the failure to be so registered or
qualified or in good standing would not have an
18
RC International MAE. Seller has all requisite corporate power and authority to
conduct the RC International Business and to own and operate the RC
International Assets.
5.2 BREACH OF RC INTERNATIONAL MATERIAL ASSUMED CONTRACTS. Subject to
obtaining the consents and approvals set forth in Schedule 5.2, neither the
execution and delivery of this Agreement or the Ancillary Agreements nor
performance by Seller of any of its obligations under this Agreement or the
Ancillary Agreements or the consummation of the transactions contemplated hereby
and thereby (in the case of each of the foregoing, solely and exclusively to the
extent that the provisions of this Agreement or such Ancillary Agreement relate
solely to the RC International Assets), will conflict with or result in a breach
of any of the terms, conditions or provisions of any RC International Material
Assumed Contract or constitute a default thereunder other than any conflict,
breach or violation that, individually or in the aggregate, would not have an RC
International MAE.
5.3 RC INTERNATIONAL LITIGATION. Except as set forth in Schedule 5.3, there
is no pending or, to the Knowledge of Seller, threatened in writing Litigation
that, individually or in the aggregate, would reasonably be expected to have an
RC International MAE.
5.4 RC INTERNATIONAL LEGAL COMPLIANCE. To the Knowledge of Seller, Seller
is in compliance in all respects with all material Laws applicable to the RC
International Business except where the failure to so comply, individually or in
the aggregate, would not have an RC International MAE.
5.5 RC INTERNATIONAL FINANCIAL STATEMENTS.
(a) Attached hereto as Schedule 5.5(a) is a Division Performance Statement
(the "Statement") for the RC International Business dated December 31, 2000
consisting of a summary income statement and selected balance sheet items. The
information contained in the Statement has been correctly extracted from the
general ledger of the RC International Business. The general ledger of the RC
International Business accurately reflects the transaction of business by the RC
International Business for the period ended, and the financial condition of the
RC International Business at, December 31, 2000.
(b) Since December 31, 2000, Seller (i) has in all material respects
conducted the RC International Business in the ordinary course and (ii) has not
experienced an RC International MAE.
5.6 TITLE TO, CONDITION OF AND LOCATION OF THE RC INTERNATIONAL ASSETS.
(a) Except as set forth on Schedule 5.6(a), Seller has good and valid title
to all tangible assets or properties included in the RC International Assets
free and clear of all Encumbrances, except for Permitted Encumbrances, and no
Affiliate of Seller has any interest in any of the RC International Assets. This
Agreement and the instruments of transfer to be executed and delivered pursuant
hereto (i) will vest in the appropriate Buyer good and valid title to all
material tangible assets included in the RC International Assets, the RC
International Current Marks, the RC International Branded Formulas and the RC
International Non-Branded Formulas free and clear of all Encumbrances other than
the Permitted Encumbrances and (ii) will transfer all other RC International
Assets not described in clause (i) above, including, without
19
limitation, the RC International Assumed Contracts, to the applicable Buyer free
and clear of all Encumbrances other than Permitted Encumbrances.
(b) Other than the Excluded Assets, a supply of raw materials for the
conduct of the RC International Business, the Common Inventory included in the
Cott Assets and the Owned Real Property, the assets included in the RC
International Assets constitute all the assets (other than people resources)
necessary to conduct the RC International Business in all material respects as
currently conducted.
(c) All of the tangible assets included in the RC International Assets are
located at 0000 Xxxxxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx. All of the material
tangible assets included in the RC International Assets which are currently used
in the RC International Business are in good working condition and, to the
Knowledge of Seller, have been maintained and repaired, consistent with
customary practices of the beverage industry, in each case ordinary wear and
tear excepted.
5.7 RC INTERNATIONAL MATERIAL ASSUMED CONTRACTS. The items listed on
Schedule 5.7 constitute, as of the date hereof, all RC International Assumed
Contracts to which Seller is a party or by which Seller or the RC International
Assets are bound, that relate solely to the conduct of the RC International
Business and that involve a term in excess of six (6) months or the receipt or
expenditure of funds in excess of $100,000 in the aggregate over the remaining
term of such Contract (collectively, the "RC International Material Assumed
Contracts"). Except as disclosed in Schedule 5.7, each RC International Material
Assumed Contract is valid and binding on Seller and in full force and effect and
Seller has not assigned any of its rights thereunder. As of the date hereof,
except as set forth in Schedule 5.7 or as would not, individually or in the
aggregate, have an RC International MAE, Seller is not in breach of, or default
under, any RC International Material Assumed Contract which has not been cured
or waived nor, to the Knowledge of Seller, is any other party to any RC
International Material Assumed Contract in breach of, or default under, any such
RC International Material Assumed Contract which has not been cured or waived.
5.8 RC INTERNATIONAL INTELLECTUAL PROPERTY. Except as set forth in Schedule
5.8,
(a) As of the Closing, Seller will have good and valid title to all of the
RC International Current Marks, the RC International Branded Formulas and the RC
International Non-Branded Formulas.
(b) No Person is engaging in any activity that materially infringes upon
any of the RC International Current Marks. To the Knowledge of Seller, no Person
is engaging in any activity that infringes upon any of the RC International
Branded Formulas or the RC International Non-Branded Formulas. The consummation
of the transactions contemplated by this Agreement will not result in the
termination, breach or impairment in any material respect of any of the rights
of Seller or the applicable Buyer, as the case may be, in any of the RC
International Current Marks, the RC International Branded Formulas or the RC
International Non-Branded Formulas.
(c) All licenses, registrations and applications filed with or recorded by
any Governmental Authority (including patent, trademark, copyright and other
licenses, registrations
20
and applications) with respect to the RC International Current Marks (other than
any bottle designs or molds therefor) are valid and in full force and effect and
all necessary registration, maintenance and renewal fees in connection therewith
have been paid and all necessary licenses, statements of use, documents and
certificates in connection therewith have been duly legalized as may be required
for filing and have been filed with the relevant patent, copyright, trademark or
other authority in the United States or foreign jurisdictions, as the case may
be, for the purpose of maintaining the licenses, registrations or applications
for registration of such RC International Current Marks.
(d) Prior to October 25, 2000, to the Knowledge of Seller, Seller
maintained, and since October 25, 2000, Seller has maintained, reasonable
security measures to protect and preserve the confidentiality and value of the
RC International Branded Formulas and the RC International Non-Branded Formulas,
and any of the technical data and processes used to manufacture the RC
International Branded Concentrates and the RC International Non-Branded
Concentrates, except to the extent that any such failure, individually or in the
aggregate, would not have an RC International MAE.
(e) The use of the RC International Current Marks (other than any bottle
designs or molds therefor) by Seller in the RC International Business does not
materially infringe on any proprietary right, trademark, trade name or service
xxxx of any other Person, nor has Seller received written notice of any
allegation thereof. To the Knowledge of Seller, the use of the RC International
Branded Formulas and the RC International Non-Branded Formulas by Seller in the
RC International Business does not infringe on any proprietary right, trademark,
trade name or service xxxx of any other Person, nor has Seller received written
notice of any allegation thereof.
5.9 RC INTERNATIONAL INVENTORY. On the date hereof and as of the Closing
Date, (a) the amount of finished inventory of RC International Branded
Concentrates and of RC International Non-Branded Concentrates included in the RC
International Assets and the amount of raw materials related exclusively to the
RC International Business included in the RC International Assets is reasonably
sufficient to operate the RC International Business as currently conducted by
Seller and in compliance with the applicable Contracts listed on Schedule
1.1(a)(v) without disruption and (b) all finished inventory of RC International
Branded Concentrates and RC International Non-Branded Concentrates included in
the RC International Assets and all raw materials related exclusively to the RC
International Business included in the RC International Assets are useable in
accordance with the terms of the applicable Contracts listed on Schedule
1.1(a)(v).
5.10 RC INTERNATIONAL ACCOUNTS RECEIVABLE. The RC International Accounts
Receivable arose from bona fide transactions in the ordinary course of business.
5.11 RC INTERNATIONAL LABOR MATTERS. (a) During the ninety-day period prior
to the date of this Agreement, Seller has not terminated any employees employed
in the RC International Business.
(b) Except as disclosed in Schedule 5.11(b), (i) Seller has not been, and
is not now, a party to any collective bargaining agreement or other labor
contract in connection with the RC International Business, (ii) there is not
pending or, to the Knowledge of Seller, threatened
21
in writing against Seller any material Litigation relating to the alleged
violation of any applicable Law pertaining to labor relations or employment
matters, including any charge or complaint filed with the National Labor
Relations Board, the Equal Employment Opportunity Commission or any comparable
Governmental Authority with respect to employees of Seller employed in the RC
International Business, (iii) to the Knowledge of Seller, currently there is no
organizational activity solely with respect to employees of Seller employed in
the RC International Business and (iv) to the Knowledge of Seller, no
application or petition for an election of or for certification of a collective
bargaining agent is pending with respect to the employees of Seller employed in
the RC International Business.
5.12 RC INTERNATIONAL CUSTOMERS. Except as set forth in Schedule 5.12,
during the twelve-month period preceding the date hereof, no material customer,
bottler, franchisee, licensee, distributor or broker of the RC International
Business has cancelled or otherwise terminated or, to the Knowledge of Seller,
threatened in writing to cancel or otherwise terminate, its relationship with
Seller or has decreased or limited materially or, to the Knowledge of Seller,
threatened to decrease or limit materially, its usage of the products of the RC
International Business.
5.13 RC INTERNATIONAL EMPLOYEE PLANS.
(a) Schedule 5.13(a) contains a complete and correct list of all the RC
International Employee Plans. Seller has provided Cott with a copy of the most
recent plan document, and any amendments thereto, or if such plan document is
not available, a complete and correct copy of the most recent summary
description of each RC International Employee Plan.
(b) No liability has been, or is expected to be, incurred by Seller with
respect to any RC International Employee Plan (either directly or indirectly)
under or pursuant to any Law applicable to such RC International Employee Plan
that, following the Closing, is not a Retained Liability. Except with respect to
any "multiemployer plan" (within the meaning of Section 3(37) of ERISA), each of
the RC International Employee Plans has been maintained and operated in material
compliance with its terms and all applicable Laws, except for any failure to
comply that, individually or together with all other such failures, will not
result in a material liability or obligation, following the Closing, on the part
of Buyers.
(c) Except as set forth in Schedule 5.13(c), neither Seller nor any of its
Affiliates has ever been obligated to contribute to any "multiemployer plan"
(within the meaning of Section 3(37) of ERISA) with respect to the Transferred
Employees in the RC International Business.
5.14 RC INTERNATIONAL INSURANCE. The RC International Business is covered
by insurance policies or programs of self-insurance of such types and in such
amounts as are reasonable and consistent in all material respects with customary
practices of the beverage industry in the relevant geographic areas.
22
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF
SELLER WITH RESPECT TO THE COTT BUSINESS
Seller hereby represents and warrants to Cott and, if applicable, all other
Buyers as follows:
6.1 GOOD STANDING OF SELLER; POWERS. Seller is registered or qualified to
do business and is in good standing in the State of Georgia and in every other
jurisdiction in which it conducts the Cott Business, except where the failure to
be so registered or qualified or in good standing would not have a Cott MAE.
Seller has all requisite corporate power and authority to conduct the Cott
BUSINESS and to own and operate the Cott Assets.
6.2 BREACH OF COTT MATERIAL ASSUMED CONTRACTS. Subject to obtaining the
consents and approvals set forth in Schedule 6.2, neither the execution and
delivery of this Agreement or the Ancillary Agreements nor performance by Seller
of any of its obligations under this Agreement or the Ancillary Agreements or
the consummation of the transactions contemplated hereby and thereby (in the
case of each of the foregoing, solely and exclusively to the extent that the
provisions of this Agreement or such Ancillary Agreement relate solely to the
Cott Assets), will conflict with or result in a breach of any of the terms,
conditions or provisions of any Cott Material Assumed Contract or constitute a
default thereunder other than any conflict, breach or violation that,
individually or in the aggregate, would not have a Cott MAE.
6.3 COTT LITIGATION. Except as set forth in Schedule 6.3, there is no
pending or, to the Knowledge of Seller, threatened in writing Litigation that,
individually or in the aggregate, would reasonably be expected to have a Cott
MAE.
6.4 COTT LEGAL COMPLIANCE. To the Knowledge of Seller, Seller is in
compliance in all respects with all material Laws applicable to each of the Cott
Business and the Owned Real Property except where the failure to so comply,
individually or in the aggregate, would not have a Cott MAE.
6.5 MATERIAL CHANGES. Subject to the Phase II, since December 31, 2000,
Seller (i) has in all material respects conducted the Cott Business and its
operation at the Owned Real Property in the ordinary course and (ii) has not
experienced a Cott MAE.
6.6 TITLE TO, CONDITION OF AND LOCATION OF THE COTT ASSETS.
(a) Except as set forth on Schedule 6.6(a), Seller has good and valid title
to all tangible assets or properties included in the Cott Assets free and clear
of all Encumbrances, except for Permitted Encumbrances, and no Affiliate of
Seller has any interest in any of the Cott Assets. This Agreement and the
instruments of transfer to be executed and delivered pursuant hereto (i) will
vest in the appropriate Buyer good and valid title to all material tangible
assets included in the Cott Assets, the Cott Marks, the Cott Current Formulas,
the Cott US Formulas and the Owned Real Property free and clear of all
Encumbrances other than the Permitted Encumbrances and (ii) will transfer all
other Cott Assets not described in clause (i) above,
23
including, without limitation, the Cott Assumed Contracts, to the applicable
Buyer free and clear of all Encumbrances other than Permitted Encumbrances.
(b) Other than the Excluded Assets, a supply of raw materials for the
conduct of the Cott Business and the Common Inventory included in the RC
International Assets, the assets included in the Cott Assets constitute all the
assets (other than people resources) necessary to conduct the Cott Business and
to operate the Owned Real Property in all material respects as each is currently
conducted or operated, as the case may be.
(c) All of the tangible assets included in the Cott Assets are located at
the Owned Real Property. All of the material tangible assets included in the
Cott Assets which are currently used in the Cott Business are in good working
condition and, to the Knowledge of Seller, have been maintained and repaired
consistent with customary practices of the beverage industry, in each case
ordinary wear and tear excepted.
6.7 COTT MATERIAL ASSUMED CONTRACTS. The items listed on Schedule 6.7
constitute, as of the date hereof, all Cott Assumed Contracts to which Seller or
any of its Affiliates is a party or by which Seller or any of its Affiliates or
the Cott Assets are bound, that relate solely to the conduct of the Cott
Business and that involve a term in excess of six (6) months or the receipt or
expenditure of funds in excess of $100,000 in the aggregate over the remaining
term of such Contract (collectively, the "Cott Material Assumed Contracts").
Except as disclosed in Schedule 6.7, each Cott Material Assumed Contract is
valid and binding on Seller or such Affiliate and in full force and effect and
neither Seller nor such Affiliate has assigned any of its rights thereunder. As
of the date hereof, except as would not, individually or in the aggregate, have
a Cott MAE, neither Seller nor any Affiliate of Seller is in breach of, or
default under, any Cott Material Assumed Contract which has not been cured or
waived nor, to the Knowledge of Seller, is any other party to any Cott Material
Assumed Contract in breach of, or default under, any such Cott Material Assumed
Contract which has not been cured or waived.
6.8 COTT INTELLECTUAL PROPERTY.
(a) As of the Closing, Seller will have good and valid title to all of the
Cott Marks, the Cott Current Formulas and the Cott US Formulas.
(b) No Person is engaging in any activity that materially infringes upon
any of the Cott Marks. To the Knowledge of Seller, no Person is engaging in any
activity that infringes upon any of the Cott Current Formulas or the Cott US
Formulas. The consummation of the transactions contemplated by this Agreement
will not result in the termination, breach or impairment in any material respect
of any of the rights of Seller or the applicable Buyer, as the case may be, in
any of the Cott Marks, the Cott Current Formulas or the Cott US Formulas.
(c) All licenses, registrations and applications filed with or recorded by
any Governmental Authority (including patent, trademark, copyright and other
licenses, registrations and applications) with respect to the Cott Marks are
valid and in full force and effect and all necessary registration, maintenance
and renewal fees in connection therewith have been paid and all necessary
licenses, statements of use, documents and certificates in connection therewith
have been duly legalized as may be required for filing and have been filed with
the relevant patent,
24
copyright, trademark or other authority in the United States or foreign
jurisdictions, as the case may be, for the purpose of maintaining the licenses,
registrations or applications for registration of such Cott Marks.
(d) Prior to October 25, 2000, to the Knowledge of Seller, Seller
maintained, and since October 25, 2000, Seller has maintained, reasonable
security measures to protect and preserve the confidentiality and value of the
Cott Current Formulas and the Cott US Formulas, and any of the technical data
and processes used to manufacture the Cott Current Concentrates and the Cott US
Concentrates, except to the extent that any such failure, individually or in the
aggregate, would not have a Cott MAE.
(e) The use of the Cott Marks by Seller in the Cott Business does not
materially infringe on any proprietary right, trademark, trade name or service
xxxx of any other Person, nor has Seller received written notice of any
allegation thereof. To the Knowledge of Seller, the use of the Cott Current
Formulas and the Cott US Formulas by Seller in the Cott Business does not
infringe on any proprietary right, trademark, trade name or service xxxx of any
other Person, nor has Seller received written notice of any allegation thereof.
(f) The Lutheran License and the Cott USA Trademark License are the only
licenses relating to the Cott Marks to which Seller or any of its Affiliates is
a party.
6.9 COTT INVENTORY. On the date hereof and as of the Closing Date, (a) the
amount of finished inventory of Cott Concentrates included in the Cott Assets
and the amount of raw materials related exclusively to the Cott Business
included in the Cott Assets is reasonably sufficient to operate the Cott
Business as currently conducted by Seller and in compliance with the Cott
Agreement without disruption and (b) all finished inventory of Cott Concentrates
included in the Cott Assets and all raw materials related exclusively to the
Cott Business included in the Cott Assets are useable in accordance with the
terms of the Cott Agreement.
6.10 COTT ACCOUNTS RECEIVABLE. The Cott Accounts Receivable arose from bona
fide transactions in the ordinary course of business.
6.11 COTT LABOR MATTERS.
(a) During the ninety-day period prior to the date of this Agreement,
Seller has terminated 13 employees employed at the Owned Real Property. No
liability has been, or is expected to be, incurred by Seller with respect to
such terminations under or pursuant to any Law applicable to the termination of
such employees (including, without limitation, the Worker Adjustment and
Retraining Notification Act) that, following the Closing, is not a Retained
Liability.
(b) Except as disclosed in Schedule 6.11(b), (i) Seller has not been, and
is not now, a party to any collective bargaining agreement or other labor
contract in connection with the Cott Business, (ii) since December 31, 2000,
there has not been, there is not presently existing, and to the Knowledge of
Seller there is not threatened, any labor strike, slowdown, picketing or work
stoppage involving employees of Seller employed in the Cott Business at the
Owned Real Property, (iii) there is not pending or, to the Knowledge of Seller,
threatened in writing against Seller any material Litigation relating to the
alleged violation of any applicable Law pertaining to
25
labor relations or employment matters, including any charge or complaint filed
with the National Labor Relations Board, the Equal Employment Opportunity
Commission or any comparable Governmental Authority with respect to employees of
Seller employed in the Cott Business at the Owned Real Property, (iv) to the
Knowledge of Seller, currently there is no organizational activity solely with
respect to employees of Seller employed in the Cott Business at the Owned Real
Property and (v) to the Knowledge of Seller, no application or petition for an
election of or for certification of a collective bargaining agent is pending
with respect to the employees of Seller employed in the Cott Business at the
Owned Real Property.
6.12 COTT EMPLOYEE PLANS.
(a) Schedule 6.12(a) contains a complete and correct list of all the Cott
Employee Plans. Seller has provided Cott with a copy of the most recent plan
document, and any amendments thereto, or if such plan document is not available,
a complete and correct copy of the most recent summary description of each Cott
Employee Plan.
(b) No liability has been, or is expected to be, incurred by Seller with
respect to any Cott Employee Plan (either directly or indirectly) under or
pursuant to any Law applicable to such Cott Employee Plan that, following the
Closing, is not a Retained Liability. Except with respect to any "multiemployer
plan" (within the meaning of Section 3(37) of ERISA), each of the Cott Employee
Plans has been maintained and operated in material compliance with its terms and
all applicable Laws, except for any failure to comply that, individually or
together with all other such failures, will not result in a material liability
or obligation, following the Closing, on the part of Buyers.
(c) Except as set forth in Schedule 6.12(c), neither Seller nor any of its
Affiliates has ever been obligated to contribute to any "multiemployer plan"
(within the meaning of Section 3(37) of ERISA) with respect to the Transferred
Employees in the Cott Business.
6.13 COTT INSURANCE. The Cott Business is covered by insurance policies or
programs of self-insurance of such types and in such amounts as are reasonable
or consistent in all material respects with customary practices of the beverage
industry in the relevant geographic areas. Each insurance policy or program of
self-insurance to which Seller is a party or a named insured as to which
proceeds are required to be paid or assigned to Buyers pursuant to Section
3.4(d) is valid and binding and in full force and effect.
6.14 OWNED REAL PROPERTY.
(a) Seller has good fee simple title to the Owned Real Property, free and
clear of all Encumbrances, except for Permitted Encumbrances. There are no
condemnation or appropriation proceedings pending or, to the Knowledge of
Seller, threatened against the Owned Real Property.
(b) The Seller has all material certificates of occupancy and material
permits necessary for the use and operation of the Owned Real Property as of the
date hereof and true and accurate copies of all such material certificates and
permits have been provided to Cott prior to the date hereof. Seller has complied
in all material respects with all conditions of such material certificates and
permits. Seller has not received any written notice from any
26
Governmental Authority to the effect that any material certificate or permit
required is lacking in connection with the use or operation of the Owned Real
Property as of the date hereof.
(c) To the Knowledge of Seller, except as set forth in Schedule 6.14(c),
all buildings and structures comprising part of the Owned Real Property are free
of material defects and have been maintained and repaired consistent with
customary practices of the beverage industry, ordinary wear and tear excepted.
(d) Seller is not a party to any lease with respect to the Owned Real
Property.
6.15 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Schedule 6.15 or as would not have a Cott MAE:
(i) Seller has obtained and holds all Environmental Permits that are
necessary to own and operate the Owned Real Property as of the date hereof.
(ii) The Owned Real Property is in compliance with all terms,
conditions and provisions of all applicable (x) Environmental Permits and
(y) Environmental Laws.
(iii) There are no pending or threatened in writing Environmental
Claims against Seller with respect to the Owned Real Property.
(iv) To the Knowledge of Seller, no Releases of Hazardous Materials
have occurred at, on or under the Owned Real Property and no Hazardous
Materials are present in or on the Owned Real Property that are reasonably
likely to give rise to an Environmental Claim against Seller.
(v) The Owned Real Property is not a current or proposed Environmental
Clean-up Site.
(vi) There are no Encumbrances (other than Permitted Encumbrances)
arising under or pursuant to any Environmental Law on the Owned Real
Property.
(vii) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted during the past five
years by or on behalf of Seller or which, to the Knowledge of Seller, are
in the possession of Seller with respect to the Owned Real Property which
have not been made available to Buyer prior to the execution of this
Agreement.
(b) Seller and Buyers acknowledge and agree that Seller shall not be deemed
to have breached any of its representations or warranties contained in this
Section 6.15 or any other Section of this Agreement by the existence of any
Environmental Condition and that Buyers' sole and exclusive remedy with respect
to any such Environmental Condition (including any Environmental Retained
Liability associated therewith) is as provided in the Remediation Agreement and
Section 3.4(f) hereof.
27
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers hereby represent and warrant to Seller as follows:
7.1 ORGANIZATION AND GOOD STANDING OF BUYERS. Cott is a corporation duly
organized, validly existing and in corporate good standing under the laws of
Canada. BCB is a corporation duly organized, validly existing and in corporate
good standing under the laws of the State of Georgia and each other Buyer is a
corporation duly organized, validly existing and in corporate good standing
under the laws of the jurisdiction of its incorporation.
7.2 POWERS; EXECUTION. Buyers have all requisite corporate power and
authority (i) to conduct their respective businesses and to own and operate
their respective assets and properties and (ii) to execute, deliver and perform
this Agreement and all other Ancillary Agreements to be executed and delivered
by Buyers pursuant to this Agreement. The execution and delivery of this
Agreement and the Ancillary Agreements have been duly and validly authorized by
all necessary corporate action on the part of each Buyer. This Agreement is, and
this Agreement and the Ancillary Agreements will be as of the Closing, validly
executed and delivered, and the valid and binding obligations of each Buyer,
enforceable against each Buyer in accordance with their respective terms.
7.3 BREACH OF STATUTE OR CONTRACT. Neither the execution and delivery of
this Agreement or the Ancillary Agreements by each Buyer nor performance by each
Buyer of its obligations under this Agreement or the Ancillary Agreements or the
consummation of the transactions contemplated hereby or thereby (a) will violate
any provision of the Certificate of Incorporation or By-Laws of such Buyer, (b)
will conflict with or result in a breach of any of the terms, conditions or
provisions of any material Contract to which such Buyer is a party or constitute
a default thereunder, (c) will violate in any material respect any Law
applicable to such Buyer or any of such Buyer's assets or properties or (d)
except for the expiration or early termination of the waiting period under the
HSR Act, requires in respect of each Buyer any approval from, consent of or
notice to any Governmental Authority or third party.
7.4 NO LITIGATION. There is no pending or, to the Knowledge of each Buyer,
threatened in writing Litigation involving any Buyer that would impair or delay
the ability of such Buyer to perform its respective obligations under this
Agreement or to consummate the transactions contemplated by this Agreement.
7.5 FINANCIAL ABILITY. Cott has cash or has existing borrowing facilities
or binding firm commitments, subject to conditions, that are sufficient to
enable it to consummate the transactions contemplated by this Agreement. The
copy of the letter regarding such facilities and commitments provided by Cott to
Seller is true and complete except for those items that are expressly redacted
therein (the "Commitment Letter"). The financing required to consummate the
transactions contemplated by this Agreement is collectively referred to as the
"Financing."
7.6 BREACHES. To the Knowledge of Buyers, Seller has not breached any
representation, warranty or covenant of Seller under this Agreement.
28
7.7 BROKERS. Except for Xxxxxx Bros., whose fees will be paid by Cott,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Cott or any Affiliate of
Cott who might be entitled to any fee or commission from Buyers or Seller in
connection with the transactions contemplated by this Agreement.
ARTICLE VIII
INDEMNITIES
8.1 SURVIVAL. The representations, warranties, covenants and agreements of
Seller and Buyers contained in or made pursuant to this Agreement and the
Ancillary Agreements shall terminate at the Closing, except that (a) the
representations and warranties made in Articles IV, V, VI and VII shall survive
in full force and effect until the second anniversary of the Closing Date;
provided, however, that, (i) the representations and warranties made in the
first sentence of Section 5.6(a), Section 5.8(a), the first sentence of Section
6.6(a) and Section 6.8(a) shall survive in full force and effect indefinitely,
(ii) the representations and warranties made with respect to matters covered by
Section 4.4 shall survive in full force and effect until the sixtieth day
immediately following the expiration of all applicable statutes of limitation,
(iii) the representations and warranties made with respect to matters covered by
Section 6.15 shall survive in full force and effect until the fourth anniversary
of the Closing Date and (iv) the representations and warranties made in the
first sentence of Section 6.14(a) shall survive in full force and effect until
the third anniversary of the Closing Date; (b) the covenants and agreements made
in this Agreement or any of the Ancillary Agreements that are to be performed or
that relate in whole or in part to periods subsequent to the Closing Date and
that do not, by their terms, expire on a date certain, shall survive in full
force and effect until the sixtieth day immediately following the expiration of
all applicable statute of limitations and otherwise, indefinitely; (c) the
covenants and agreements made in Article II shall survive in full force and
effect until such time as they are fully complied with; and (d) the covenants
and agreements made in this Agreement or any of the Ancillary Agreements that
are to be performed or that relate in whole or in part to periods subsequent to
the Closing Date and that, by their terms, expire on a date certain, shall
survive until such date certain; provided that any representation, warranty,
covenant or agreement that would otherwise terminate in accordance with clauses
(a), (b), (c) or (d) above will continue to survive if a notice of claim shall
have been timely given under Section 8.4 on or prior to such termination date,
until the related claim for indemnification has been satisfied or otherwise
resolved.
8.2 GENERAL INDEMNIFICATION BY SELLER.
(a) From and after the Closing, Seller shall, subject to the provisions of
this Article VIII, indemnify, defend and hold harmless each Buyer and its
respective employees, officers, directors, representatives, agents and
Affiliates (the "Buyer Indemnified Parties") from, against and in respect of any
and all damages, claims, losses, charges, actions, suits, proceedings and
reasonable costs and expenses (but, other than with respect to any breach of any
of the covenants contained in Article XI, not including, consequential,
exemplary, special and punitive damages and lost profits, other than such
damages awarded to any third party against a Buyer Indemnified Party)
(collectively, the "Losses") sustained or incurred by a Buyer Indemnified
29
Party as a result of or in connection with: (i) the Retained Liabilities,
including, without limitation, any claim for or relating to product liability or
defective product arising from sales of RC International Branded Concentrates or
RC International Non-Branded Concentrates prior to the Closing Date but
excluding all Retained Liabilities arising out of, related to or in connection
with (x) any breach by Seller of any of the representations or warranties
contained in Section 6.15, (y) any Environmental Condition or (z) the
environmental condition of the Owned Real Property (whether or not an
Environmental Condition and whether or not the existence of such condition
constitutes a breach by Seller of any of the representations or warranties
contained in Section 6.15) ((x), (y) and (z) being, collectively, the
"Environmental Retained Liabilities"), (ii) the Environmental Retained
Liabilities, (iii) any breach of a representation or warranty made herein by
Seller, (iv) the failure of Seller and Buyers to comply with any applicable bulk
transfer laws or (v) any breach by Seller of any of the covenants or agreements
contained in this Agreement to be performed by Seller (other than with respect
to the Retained Liabilities or Environmental Retained Liabilities).
(b) Notwithstanding any other provision of this Agreement to the contrary,
Seller shall not be required to indemnify, defend or hold harmless any Buyer
Indemnified Party against, or reimburse any Buyer Indemnified Party for, any
Losses pursuant to Section 8.2(a) above, (i) with respect to any claim under
Sections 8.2(a)(ii) or (iii) unless such claim involves Losses in excess of
*[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] (nor shall any such claim involving
Losses of *[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] or less be applied to or
considered for purposes of calculating the aggregate amount of the Buyer
Indemnified Parties' Losses) and (ii) unless the applicable Buyer has notified
Seller in writing in accordance with Section 8.4 of a pending or threatened
claim with respect to such matters within the applicable survival period set
forth in Section 8.1. In addition to the requirements of the first sentence of
this Section 8.2(b), Seller shall not be required to indemnify, defend or hold
harmless any Buyer Indemnified Party against, or reimburse any Buyer Indemnified
Party for, Losses pursuant to Section 8.2(a)(ii) to the extent they relate to
the RC International Assets or the RC International Business, unless and until
the aggregate amount of such Buyer Indemnified Parties' Losses exceeds
*[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] after which Seller shall be
obligated for all such Losses of the Buyer Indemnified Parties only in excess of
*[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED], but not to exceed, in the
aggregate, *[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] (the "RC International
Cap"); provided, however, that if Losses of the Buyer Indemnified Parties on
account of breaches of the first sentence of Section 5.6(a) or Section 5.8(a),
in the aggregate, when added to all other Losses, if any, subject to the RC
International Cap, are in excess of the RC International Cap, Seller shall
indemnify the Buyer Indemnified Parties for the amount of such Losses in excess
of the RC International Cap, provided that such excess amount shall not exceed,
in the aggregate, *[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]. In addition to
the requirements of the first sentence of this Section 8.2(b), Seller shall not
be required to indemnify, defend or hold harmless any Buyer Indemnified Party
against, or reimburse any Buyer Indemnified Party for, Losses pursuant to
Section 8.2(a)(ii) or (iii) to the extent that they relate to the Cott Assets or
the Cott Business, unless and until the aggregate amount of such Buyer
Indemnified Parties' Losses exceeds (x) *[CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED] (in the case of Losses arising other than on account of a breach of
any of the representations or warranties contained in Section 6.15 or any
Environmental Retained Liability) and (y) *[CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED] in the case of Losses arising out of a breach of any of the
representations or warranties contained in Section 6.15 or any Environmental
Retained Liability, after which, in either case, Seller shall be obligated for
all such Losses of the Buyer Indemnified Parties only in excess of
*[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] (as reduced by any Environmental
Remedial Costs paid by Cott pursuant to and in accordance with the Remediation
Agreement) but not to exceed, for all such Losses under
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Section 8.2(a)(ii) and (iii), *[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED] (as
reduced by any Environmental Remedial Costs paid by Seller pursuant to and in
accordance with the Remediation Agreement) (the "Cott Cap"); provided, however,
that if Losses of the Buyer Indemnified Parties on account of breaches of the
first sentence of Section 6.6(a) or Section 6.8(a) or the first sentence of
Section 6.14(a), in the aggregate, when added to all other Losses subject to the
Cott Cap, are in excess of the Cott Cap, Seller shall indemnify the Buyer
Indemnified Parties for the amount of such Losses in excess of the Cott Cap,
provided that such excess amount shall not exceed, in the aggregate,
*[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED].
(c) Solely for purposes of calculating the Losses that are subject to
indemnification by Seller pursuant to Section 8.2(a) (and not for purposes of
determining whether a breach of any representation, warranty, covenant or
agreement hereunder has occurred), all qualifications as to materiality, RC
International MAE and/or Cott MAE contained in any representation or warranty,
covenant or agreement in this Agreement shall not be considered.
(d) All Losses sustained by any Buyer Indemnified Party on account of a
claim for breach of any representation or warranty under Article V shall be
subject to the RC International Cap. All Losses sustained by any Buyer
Indemnified Party on account of a claim for a breach of any representation or
warranty under Article VI shall be subject to the Cott Cap. The portion of any
Losses sustained by any Buyer Indemnified Party on account of a claim for a
breach of any representation or warranty under Article IV that is attributable
to the RC International Assets or the RC International Business shall be subject
to the RC International Cap. The portion of any Losses sustained by any Buyer
Indemnified Party on account of a claim for a breach of representation under
Article IV that is attributable to the Cott Assets or the Cott Business shall be
subject to the Cott Cap.
(e) Notwithstanding anything to the contrary contained herein, and without
limitation to any of Seller's rights hereunder, no Buyer Indemnified Party shall
be entitled to bring any claim under Section 8.2(a) and Seller shall not be
obligated for any Buyer Indemnified Parties' Losses under Section 8.2(a), for
any breach of any representation, warranty or covenant by Seller hereunder of
which Buyers' had Knowledge on or prior to the Closing.
8.3 GENERAL INDEMNIFICATION BY COTT. From and after the Closing, Cott
shall, subject to the provisions of this Article VIII, indemnify, defend and
hold harmless Seller, its employees, officers, directors, representatives,
agents and Affiliates (the "Seller Indemnified Parties"), from, against and in
respect of any and all Losses sustained or incurred by a Seller Indemnified
Party as a result of or in connection with: (a) the Assumed Liabilities, (b) any
breach of a representation or warranty made herein by any Buyer or any of its
Affiliates, (c) any breach by any Buyer or any of its Affiliates of any of the
covenants or agreements contained in this Agreement to be performed by such
Buyer or any of its Affiliates or (d) any third party claim (other than by a
bottler of the RC Domestic Business (exclusive of claims arising out of Article
XI)) as a result of the operation of the RC International Business (including
without limitation the manufacture of the RC International Branded Concentrates
or the RC International Non-Branded Concentrates), the operation of the Cott
Business (including without limitation the manufacture of the Cott Current
Concentrates or the Cott US Concentrates) or the ownership of the Assets after
the Closing. Notwithstanding any other provision of this Agreement to the
contrary, Cott shall not be required to indemnify, defend or hold harmless any
Seller Indemnified Party against, or reimburse any Seller Indemnified Party for,
any Losses pursuant to this Section
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8.3, with respect to any claim under Section 8.3(b) unless such claim involves
Losses in excess of $30,000.
8.4 METHOD OF ASSERTING CLAIMS. Subject to Section 8.1, all claims for
indemnification under this Article VIII by any party claiming indemnification
hereunder (an "Indemnified Party") will be asserted and resolved as follows.
(a) In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under this Article VIII is asserted against or sought
to be collected from such Indemnified Party by a Person other than either the
parties hereto or any Affiliate of the parties hereto (a "Third Party Claim"),
the Indemnified Party shall deliver a written notification of such Third Party
Claim specifying the nature of and basis for such Third Party Claim, together
with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim (a "Claim Notice") with
reasonable promptness to the party against whom a claim for indemnification is
being asserted hereunder (an "Indemnifying Party"). If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party will be obligated to indemnify the Indemnified Party with respect to such
Third Party Claim except to the extent that the Indemnifying Party's ability to
defend is prejudiced by such failure of the Indemnified Party. The Indemnifying
Party will notify the Indemnified Party within fifteen (15) calendar days
following receipt of the Claim Notice (the "Dispute Period") whether the
Indemnifying Party accepts or disputes its liability to the Indemnified Party
under this Article VI and whether the Indemnifying Party desires, at its sole
cost and expense, to defend the Indemnified Party against such Third Party
Claim.
(i) If the Indemnifying Party notifies the Indemnified Party within the
Dispute Period that the Indemnifying Party desires to defend the Indemnified
Party with respect to the Third Party Claim pursuant to this Section 8.4, then
the Indemnifying Party will have the right to defend, with counsel reasonably
satisfactory to the Indemnified Party, at the sole cost and expense of the
Indemnifying Party, such Third Party Claim by all appropriate proceedings, or,
at the discretion of the Indemnifying Party, to settle such Third Party Claim
(but only with the consent of the Indemnified Party, which shall not be
unreasonably withheld, in the case of any settlement that provides for any
relief other than the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified Party will not be
indemnified in full pursuant to this Article VIII). Subject to the foregoing,
the Indemnifying Party will have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that the
Indemnified Party may, at the cost and expense of the Indemnifying Party, at any
time prior to the Indemnifying Party's delivery of the notice referred to in the
first sentence of this Section 8.4(a)(i), file any motion, answer or other
pleadings or take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect its interests; and provided,
further, that if requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying Party, provide full
cooperation to the Indemnifying Party and its counsel in contesting any Third
Party Claim that the Indemnifying Party elects to contest. The Indemnified Party
may participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this Section 8.4
and, except as provided in the preceding sentence, the Indemnified Party will
bear its own costs and expenses with respect to such participation.
Notwithstanding
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the foregoing, the Indemnified Party may take over the control of the defense or
settlement of a Third Party Claim at any time if it irrevocably waives its right
to indemnity under this Article VIII with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the Third Party
Claim, or if the Indemnifying Party gives such notice but any time thereafter
fails diligently to prosecute or defend or settle the Third Party Claim, or if
the Indemnifying Party fails to give any notice whatsoever within the Dispute
Period, then the Indemnified Party will have the right to defend, at the sole
cost and expense of the Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings will be prosecuted by the Indemnified
Party in good faith or will be settled at the discretion of the Indemnified
Party (but only with the consent of the Indemnifying Party, which shall not be
unreasonably withheld or delayed, in the case of any settlement that provides
for any relief other than the payment of monetary damages). The Indemnified
Party will have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at the sole cost and expense of
the Indemnifying Party, provide reasonable cooperation to the Indemnified Party
and its counsel in contesting any Third Party Claim which the Indemnified Party
is contesting. Notwithstanding the foregoing provisions of this Section 8.4, if
the Indemnifying Party has notified the Indemnified Party within the Dispute
Period that the Indemnifying Party disputes its liability hereunder to the
Indemnified Party with respect to such Third Party Claim and if such dispute is
resolved in favor of the Indemnifying Party in the manner provided in clause
(iii) below, the Indemnifying Party will not be required to bear the costs and
expenses of the Indemnified Party's defense pursuant to this Section 8.4 or of
the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party will reimburse the Indemnifying Party in full
for all reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may participate in, but
not control, any defense or settlement controlled by the Indemnified Party
pursuant to this Section 8.4, and the Indemnifying Party will bear its own costs
and expenses with respect to such participation.
(iii) Subject to Section 8.2(b), if the Indemnifying Party notifies the
Indemnified Party that it accepts its indemnification liability to the
Indemnified Party with respect to the Third Party Claim under this Article VIII
or fails to notify the Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes its liability to the Indemnified Party with respect
to such Third Party Claim, the Losses identified in the Claim Notice, as finally
determined, will be conclusively deemed a liability of the Indemnifying Party
under this Article VIII and the Indemnifying Party shall pay the amount of such
Losses to the Indemnified Party on demand plus interest at the Agreed Rate from
the date of the receipt of the applicable Claim Notice to the date of such
payment. If the Indemnifying Party timely disputes its liability with respect to
such Third Party Claim, the Indemnifying Party and the Indemnified Party will
proceed in good faith to negotiate a resolution of such dispute, and if not
resolved through negotiations within the thirty (30) calendar days following
receipt by an Indemnified Party of a Dispute Notice (the "Resolution Period"),
such dispute shall be resolved by litigation in a court of competent
jurisdiction.
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(b) In the event any Indemnified Party should have a claim under this
Article VIII against any Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver a written notification of a claim for
indemnity under this Article VIII specifying the nature and basis for such
claim, together with the amount, or, if not then reasonably ascertainable, the
estimated amount, determined in good faith, of such claim (an "Indemnity
Notice") with reasonable promptness to the Indemnifying Party. The failure or
delay by any Indemnified Party to give the Indemnity Notice shall not impair
such party's rights hereunder except to the extent that such failure or delay
prejudices an Indemnifying Party. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Indemnity
Notice, the Losses indemnified in the Indemnity Notice will be conclusively
deemed a liability of the Indemnifying Party under this Article VIII and the
Indemnifying Party shall pay the amount of such Losses to the Indemnified Party
on demand. If the Indemnifying Party has timely disputed its liability with
respect to such claim, the Indemnifying Party and the Indemnified Party will
proceed in good faith to negotiate a resolution of such dispute and, if not
resolved through negotiations within the Resolution Period, such dispute shall
be resolved by litigation in a court of competent jurisdiction.
8.5 EXCLUSIVE REMEDIES. Following the Closing, except for specific
performance of the obligations set forth in Article II and Article XI and as
provided in the last sentence of Section 11.5(b), Seller and Buyers acknowledge
and agree that the indemnification provisions of Sections 8.2 and 8.3 shall be
the sole and exclusive remedies of Seller and Buyers, respectively, for any
breach of the representations or warranties herein or nonperformance of any
covenants and agreements herein of the other party.
8.6 CERTAIN ADJUSTMENTS.
(a) The amount of any Losses for which indemnification is provided under
this Article VIII shall be reduced by any insurance recovery by the Indemnified
Party if and when actually received in respect of such Losses. Any such recovery
shall be promptly repaid by the Indemnified Party to the Indemnifying Party
following the time at which such recovery is received pursuant to the previous
sentence, minus all reasonably allocable costs, charges and expenses incurred by
the Indemnified Party in obtaining such recovery. Notwithstanding the foregoing,
if (x) the amount of Losses for which the Indemnifying Party is obligated to
indemnify the Indemnified Party is reduced by any insurance recovery in
accordance with the provisions of the previous sentence, and (y) the Indemnified
Party subsequently is required to repay the amount of any such insurance
recovery or such insurance recovery is disallowed, then the obligation of the
Indemnifying Party to indemnify with respect to such amounts shall be reinstated
immediately and such amounts shall be paid promptly to the Indemnified Party in
accordance with the provisions of this Agreement.
(b) If there is a Tax Benefit of $10,000 or more (or any combination of
Tax Benefits that is, in the aggregate, $10,000 or more) for any period, the
Indemnified Party shall promptly pay to the Indemnifying Party (taking into
account other payments made by the Indemnified Party to the Indemnifying Party
with respect to such Tax Benefit for prior periods) the lesser of (i) the amount
that will leave the Indemnified Party in the same after-Tax position (taking
into
34
account, with respect to Taxes, only actual Taxes paid and actual Tax refunds
received) as if such Tax Benefit had not been realized and (ii) the amount of
the indemnification payment received by the Indemnified Party as a result of
such Loss. In calculating the availability and amount of any Tax Benefit that
could result in a payment under this Section 8.6(b), the Indemnified Party shall
act, in good faith and in the same manner in which it would calculate the
availability and amount of any item of deduction, loss, credit, carryover or
carryback for which it would not have a payment obligation under this Section
8.6(b) or otherwise to a third party, after applying all other items of
deduction, loss, credit, carryover or carryback that are then available and that
reasonably would be applied prior to such Tax Benefit under applicable Law. If
such Tax Benefit is subsequently disallowed in whole or part by any relevant
Taxing authority, the Indemnifying Party shall promptly pay to the Indemnified
Party, following notice of such disallowance by the Indemnified Party, an amount
equal to the lesser of (i) the amount that will leave the Indemnified Party in
the same after-Tax position (taking into account, with respect to Taxes, only
actual Taxes paid and actual Tax refunds received, after giving effect to such
disallowance) as if such Tax Benefit, to the extent still realized, had not been
realized, and (ii) the amount of payments previously received by the
Indemnifying Party from the Indemnified Party with respect to such Tax Benefit
pursuant to this Section 8.6(b), plus in the case of (ii), interest thereon at
the Agreed Rate, from the date of the Indemnifying Party's receipt of such
payment. At the request of the Indemnifying Party, the Indemnified Party will
certify as to the amount, if any, of such Tax Benefit (or disallowance) covered
by this Section for any period, which certification shall include a calculation
of any such Tax Benefit and, to the extent that such Tax Benefit is not
available or does not result in a payment under this Section 8.6(b) (or such
disallowance results in an obligation to return any such payment under this
Section 8.6(b)), an explanation as to the reason for such result (including the
extent and nature of any potential Tax Benefit for that period that could result
in a payment under this Section 8.6(b) and whether such Tax Benefit is not
available because of other items of deduction, loss, credit, carryover or
carryback that are being applied for that period. The Indemnifying Party may
also request, at its expense, that the Indemnified Party's independent
accountants provide a certification that they have reviewed the Indemnified
Party's certification and accompanying explanation, if any, and determined it is
proper, which certification shall be final and binding on the parties hereto in
the absence of manifest error; provided that if such accountants determine that
such certification should properly have stated such Tax Benefit (or
disallowance) to be greater by an amount in excess of 5%, the Indemnified Party
shall be responsible for the expenses of such accountants and the Indemnified
Party shall take into account such increased Tax Benefit in calculating its
payment obligation to the Indemnifying Party under this Section 8.6(b).
ARTICLE IX
COVENANTS PENDING CLOSING
9.1 ACCESS TO INFORMATION. From the date hereof until the Closing (upon
reasonable prior notice to and approval of Seller, which shall not be
unreasonably withheld) during normal business hours with the purpose that an
uninterrupted and efficient transfer of the RC International Business and the
Cott Business may be accomplished, Seller shall, and shall cause its officers,
directors, employees, auditors and agents engaged in the RC International
Business and the Cott Business to afford the officers, employees and authorized
agents, advisors, lenders, potential sources of financing and other
representatives of Cott reasonable access to the offices,
35
properties, books and records and key personnel solely and exclusively related
to the RC International Business or the Cott Business or material to the
operation of the Owned Real Property; provided, however, that (a) such
investigations shall not unreasonably interfere with any of the businesses or
operations of Seller or any Affiliate of Seller, including the RC International
Business and the Cott Business and, to the extent possible, shall be conducted
concurrently so as to minimize disruption; (b) Seller shall not be required to
provide any such information or access to the extent that such information or
access would cause Seller to be in breach of any confidentiality restrictions
applicable to it; and (c) such investigations shall not include any RC Domestic
Business or confidential pricing or other terms of any supply agreements. In
addition to the foregoing, Seller shall permit and assist Cott to have access to
the customers of the RC International Business (including the bottlers), at such
times and in such manner as is mutually acceptable to Cott and Seller.
9.2 CONDUCT OF BUSINESS PENDING CLOSING. Except as otherwise contemplated
by this Agreement or as set forth in Schedule 9.2, during the period from the
date hereof to the Closing, Seller shall conduct the RC International Business
and the Cott Business and shall operate the Owned Real Property only in the
ordinary course consistent with reasonably prudent practice in light of the
current conduct of the RC International Business and the Cott Business and its
operation of the Owned Real Property, as applicable, and use commercially
reasonable best efforts to comply in all material respects with all applicable
Laws. In addition, from and after the date hereof to the Closing Date, except as
otherwise provided in this Agreement or as otherwise contemplated hereby or as
set forth in Schedule 9.2, Seller shall not, without the prior written consent
of Cott (which consent shall not be unreasonably withheld, conditioned or
delayed):
(i) directly or indirectly sell, lease, license, sell and lease back,
mortgage or otherwise encumber or subject to any Encumbrance (other than a
Permitted Encumbrance) or otherwise dispose of any of the Assets or any
interest therein, except (i) sales of assets (including, without
limitation, distribution rights with respect to the RC International
Branded Concentrates or the RC International Non-Branded Concentrates) in
the ordinary course of business consistent with past practice or, with
respect to the Cott Current Concentrates, as permitted under the Cott
Agreement, (ii) pledges or encumbrances pursuant to existing borrowing
arrangements or (iii) any such transaction not otherwise permitted by this
Section 9.2(i) with an aggregate value not to exceed $50,000;
(ii) except in the ordinary course of business, enter into any
material employment or severance agreement with any Employee;
(iii) (x) incur any indebtedness or guarantee any indebtedness of
another Person, guarantee any debt securities of another Person, enter into
any "keep well" or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing or (y) make any loans, advances or
capital contributions to, or investments in, any other Person, except, in
the cases of clauses (x) and (y) above, agreements or arrangements entered
into in the ordinary course of business consistent with past practice;
36
(iv) solely with respect to the RC International Business or the Owned
Real Property, incur or commit to incur any capital expenditures in an
individual amount exceeding $20,000 or $100,000 in the aggregate;
(v) (A) grant to any Employee or independent contractor of the RC
International Business or the Cott Business any material increase in cash
compensation (except for cost of living increases or contractually mandated
increases) or pay any bonus, other than in the ordinary course of business
consistent with past practice or (B) grant to any Employee or independent
contractor of the RC International Business or the Cott Business any
increase in severance or termination pay;
(vi) transfer or license to any Person or otherwise extend, amend or
modify any rights to any material Intellectual Property other than in the
ordinary course of business consistent with past practice; or
(vii) terminate, modify or amend any of the Material Assumed Contracts
other than in the ordinary course of business consistent with past
practice.
9.3 REASONABLE BEST EFFORTS. From the date of this Agreement to the Closing
Date, Seller and each Buyer shall use its respective reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, and to
assist and cooperate with the other in doing, all things reasonably necessary to
consummate the transactions contemplated by this Agreement including (i)
obtaining the consent of any Governmental Authority or third party required by
this Agreement, (ii) defending any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
any of the transactions contemplated by this Agreement, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Authority vacated or reversed and (iii) executing and delivering
any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement; provided, however,
that neither Seller nor any Buyer shall be obligated with respect to such
efforts (x) to expend any funds except the payment of the fees and expenses of
any applicable attorneys, consultants or other advisors retained by it or (y) to
take any actions with respect to its business, the RC International Business or
the Cott Business which, in its reasonable judgment, is materially adverse,
including, but not limited to, agreeing to any modification of a contract term;
provided, further, that Buyers shall be deemed to have satisfied their
obligations under this Section 9.3 with respect (A) to obtaining the Financing
on substantially the terms and conditions of the Commitment Letter if they and
their Affiliates have complied with all their respective material obligations
contained in the Commitment Letter and (B) to obtaining the Financing on terms
substantially similar to those contained in the Commitment Letter if they and
their Affiliates use all commercially reasonable efforts to obtain the Financing
on terms substantially similar to those contained in the Commitment Letter from
any other lender reasonably acceptable to Cott and have complied with all their
respective material obligations, if any, of such new commitment letter;
provided, however, Buyers shall not be obligated with respect to such efforts
(i) to expend any funds except the payment of the fees and expenses of any
applicable attorneys, consultants or other advisors (including such lender)
retained by them or (ii) to take any actions with respect to its business which,
in its reasonable judgment, is materially adverse, including, but not limited
to, agreeing to any modification of a contract term.
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9.4 PUBLIC ANNOUNCEMENTS. All press releases and other public disclosure
concerning the transactions contemplated hereby from and after the date hereof
will be subject to review and approval by Seller and Cott, such approval not to
be unreasonably withheld, provided that to the extent a party shall be required
to make an announcement pursuant to the Laws of its home jurisdiction or any
jurisdiction in which any of its securities are publicly traded or the rules of
any stock exchange upon which its securities are listed or any registered
securities quotation system on which such securities are traded or pursuant to
judicial or administrative process, such party shall provide a copy of any such
announcement to the other party prior to such announcement but shall not be
obligated to obtain the consent of the other party prior to making such
announcement; and provided, further, that Seller may disclose the transactions
contemplated hereby to (a) The Coca-Cola Company (so long as The Coca-Cola
Company has been previously advised of the terms of this Section 9.4 applicable
to Seller and has agreed in writing to be bound by them and has entered into an
agreement with Seller having restrictions substantially similar to those
applicable to Cott in the Confidentiality Agreement regarding its disclosure of
the information provided by Seller) and (b) upon prior notice to and
consultation with Cott as to the general terms of such disclosure, any employee
employed in the RC International Business or at the Owned Real Property.
9.5 BUYERS. Cott shall cause each entity designated in accordance with
Section 12.8(a) to execute and deliver a joinder agreement to this Agreement
agreeing to be bound by the terms and conditions of this Agreement in the
capacity as a "Buyer" hereunder, effective as of the date of such joinder
agreement, and, on the Closing Date, to make all of the representations and
warranties contained in Article VII to Seller.
9.6 REMEDIATION AGREEMENT. No later than five days immediately following
the date hereof, Seller and Cott shall execute and deliver a Remediation
Agreement (the "Remediation Agreement") containing the terms and conditions of
Exhibit I attached hereto and such other terms and conditions as the parties
determine to be mutually acceptable (both acting reasonably and in good faith)
and which are not inconsistent with Exhibit I.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by the mutual written consent of Cott and Seller;
(b) by either Cott or Seller, if the Closing shall not have occurred by the
two-month anniversary of the date of this Agreement, provided that if the
Closing has not occurred as a result of a failure of a party to fulfill any of
the conditions of Closing provided herein, other than with respect to the
Financing, that is within the reasonable control of such party to fulfill, then
such party (or, in the case of Cott, any other Buyer) shall not be entitled to
exercise such right of termination;
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(c) by either Seller or Cott, upon notification to the non-terminating
party by the terminating party that the satisfaction of any condition to the
terminating party's obligations under this Agreement becomes impossible or
impracticable with the use of commercially reasonable efforts (other than with
respect to the Financing) if the failure of such condition to be satisfied is
not caused by a breach hereof by the terminating party;
(d) by Cott, if the Closing shall not have occurred by the two-month
anniversary of the date of this Agreement solely and exclusively on account of
the failure to fulfill the condition of closing set forth in Section 3.4(j);
(e) by Seller, at any time prior to the Closing but no later than five (5)
Business Days immediately following Seller's receipt of the Phase II, if the
Phase II shall have been received and the Environmental Remedial Costs are in
excess of $3 million; or
(f) by Cott, at any time prior to the Closing but no later than five (5)
Business Days immediately following Cott's receipt of the Phase II, if the Phase
II shall have been received and the Environmental Remedial Costs are in excess
of $20 million.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 10.1(a), (e) or (f), this Agreement shall forthwith become null and void
and there shall be no liability on the part of any party hereto except for the
provisions of 11.1 and 11.9 and as will be provided pursuant to the Remediation
Agreement. In the event of any other termination, the parties shall retain any
and all rights, claims or causes of action in existence at the time of such
termination which are based upon or arose incidental to a breach of any
covenant, representation or warranty made hereunder.
ARTICLE XI
FURTHER COVENANTS
11.1 CONFIDENTIALITY.
(a) The terms of the letter agreement dated as of December 18, 2000 (the
"Confidentiality Agreement") between Seller and Cott are hereby incorporated
herein by reference and shall continue in full force and effect until the
Closing, at which time the obligations of Buyers under this Section 11.1(a) and
the Confidentiality Agreement shall terminate except in respect of that portion
of the Evaluation Material (as defined in the Confidentiality Agreement)
exclusively relating to the RC Domestic Business. If this Agreement is, for any
reason, terminated prior to the Closing, the Confidentiality Agreement shall
nonetheless continue in full force and effect in all respects.
(b) Except as otherwise provided in Section 11.1(c), from the date hereof
and after the Closing, each party hereto will hold, and will cause its
Affiliates and their respective representatives to hold, in strict confidence
from any Person (other than such party and its directors, officers, employees,
authorized agents and advisors, lenders and potential lenders and Affiliates)
all documents and information concerning the other party furnished to it by the
other party or such other party's representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to
39
have been (x) previously known by the party receiving such documents or
information, (y) in the public domain (either prior to or after the furnishing
of such documents or information hereunder) through no fault of such receiving
party or (z) acquired by the receiving party from another source if the
receiving party is not aware that such source is under an obligation to another
party hereto to keep such documents and information confidential or unless (i)
compelled to disclose by judicial or administrative process (including without
limitation in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby from Governmental
Authorities) or by other requirements of Law or rules of applicable stock
exchanges, (ii) disclosed in a Litigation brought by a party hereto in pursuit
of its rights or in the exercise of its remedies hereunder or (iii) if such
documents and information are Contracts included in the Assets, to the other
parties thereto. Should either party be required to disclose any such
information in response to a court order or as otherwise required by Law or
administrative process, it shall inform the other party in writing of such
obligation as soon as possible after it is informed of it and, if possible,
before any information is disclosed, so that a protective order or other
appropriate remedy may be sought by the non-disclosing party. If either party is
so obligated to make such a disclosure, it shall only make the disclosure to the
extent to which it is so obligated and in a manner which maintains
confidentiality to the maximum extent legally permitted, but not further or
otherwise. The provisions of this Section 11.1(b) shall survive the Closing.
(c) From the date hereof and continuing indefinitely after the Closing,
each party hereto will keep, and will cause its Affiliates and their respective
representatives to keep, confidential, in accordance with at least the same
degree of care that it affords its other proprietary information of a similar
nature, but in any case no less than a reasonable degree of care and consistent
with good industry practice, the Formulas and the Formula Information (and, in
each case, any derivations thereof). *[CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED]
provided, however, that a party may disclose Formulas or Formula
Information (i) subject to Section 11.4(a), to the purchaser of such Formula or,
in the case of the RC International Formulas, the purchaser of the RC
International Business or, in the case of the Cott Formulas, the purchaser of
the Cott Business or (ii) if compelled to disclose such by judicial or
administrative process or other requirements of Law or the rules of any
applicable stock exchange; provided, further, that it informs the other party in
writing of such obligation as soon
40
as possible after it is informed of it and, if possible, before any information
is disclosed, so that a protective order or other appropriate remedy may be
sought by the non-disclosing party. If a party is so obligated to make such a
disclosure, it shall only make the disclosure to the extent to which it is so
obligated and in a manner which maintains confidentiality to the maximum extent
legally permitted, but not further or otherwise.
The provisions of this Section 11.1(c) shall survive the Closing.
11.2 RESTRICTIVE COVENANTS OF SELLER. In connection with the grants of
intellectual property elsewhere in this Agreement, to preserve and protect the
intellectual property of Seller and Buyers, recognizing that intellectual
property may in some cases be misappropriated and that it may be difficult to
detect such misappropriation, and to promote the development and marketing of
such intellectual property, Seller and Cott agree as follows:
(a) Subject to Section 11.3(e), beginning on the Closing Date and
continuing thereafter without limitation, neither Seller nor any of its
Affiliates shall use any of the Formulas or Formula Information (and in each
case, any derivations thereof) in any manner, including, without limitation, in
the development, manufacture, sale or distribution of carbonated soft drinks or
concentrates or emulsions used in the production of concentrates, which
concentrates or emulsions are used in the production of carbonated soft drinks,
whether or not (and, without limitation) such carbonated soft drinks are branded
carbonated soft drinks or Private Label Soft Drinks.
(b) During the period beginning on the Closing Date and ending on
December 31, 2014, Seller shall not develop, manufacture, sell or distribute any
Private Label Soft Drinks or any concentrates, or emulsions used in the
production of concentrates, which concentrates or emulsions are used in the
production of Private Label Soft Drinks. For greater certainty, except to the
extent provided in Sections 11.2(a) and 11.2(c), it is understood that the
restriction in this Section 11.2(b) on the development, manufacturing, sale or
distribution of Private Label Soft Drinks does not apply to any Affiliate of
Seller.
(c) Seller hereby acknowledges and agrees that, during the period
beginning on the Closing Date and ending on December 31, 2014, Seller and its
Affiliates shall only use the RC Domestic Formulas and any derivatives thereof
for the development, manufacture, sale or distribution of carbonated soft drinks
under the RC Domestic Marks, trademarks substantially similar to such RC
Domestic Marks or marks otherwise incorporating the "RC" brand or, in each case,
brand extensions thereon, outside the Territory. Without limiting the foregoing
and for purposes of clarification, during the period beginning on the Closing
Date and ending on December 31, 2014, neither Seller nor any of its Affiliates
shall under any circumstances (i) use, authorize the use by any other Person of,
or grant permission (by license or otherwise) to any other Person to use, the RC
Domestic Formulas or any derivative thereof in the development, manufacture,
sale or distribution, anywhere in the world, of concentrates, or emulsions used
in the production of concentrates, which concentrates and emulsions are used in
the production of
41
Private Label Soft Drinks; nor (ii) represent, state or imply, or authorize or
grant permission (by license or otherwise) to any other Person to represent,
state or imply, that any Private Label Soft Drinks or any concentrates or
emulsions used in the production of any Private Label Soft Drinks incorporate,
are substantially identical to or are derived or developed from the RC Domestic
Formulas, the RC International Formulas or the Cott Formulas or any product
produced with the RC Domestic Formulas.
(d) During the period beginning on the Closing Date and ending on December
31, 2014, neither Seller nor any of its Affiliates, under any circumstances,
shall, or shall authorize any other Person to, or shall grant permission (by
license or otherwise) to any other Person to, develop, manufacture, sell or
distribute any products incorporating, derived from or otherwise using any of
the RC Domestic Formulas or the RC Domestic Formula Information (i) inside the
Territory or (ii) outside the Territory if Seller or any of its Affiliates has
reason to believe that such products will ultimately be sold or distributed
inside the Territory. During such period, Seller further agrees to expressly
prohibit any such activity inside the Territory and to use all reasonable
efforts to enforce such prohibitions in respect of any direct or indirect
violations thereof by itself, any Affiliate or any such other Person.
11.3 RESTRICTIVE COVENANTS OF COTT. In connection with the grants of
intellectual property elsewhere in this Agreement, to preserve and protect the
intellectual property of Seller and Buyers, recognizing that intellectual
property may in some cases be misappropriated and that it may be difficult to
detect such misappropriation, and to promote the development and marketing of
such intellectual property, Seller and Cott agree as follows:
(a) During the period beginning on the Closing Date and ending on December
31, 2014, neither Cott nor any Affiliate of Cott under any circumstances (i)
shall use, authorize the use by any other Person of, or grant permission (by
license or otherwise) to any other Person to use, the Cott Formulas or any
derivative thereof in the development, manufacture, sale or distribution,
anywhere in the world, of concentrates, or emulsions used in the production of
concentrates, which concentrates and emulsions are used in the production of
Branded Carbonated Soft Drinks nor (ii) represent, state or imply, or authorize
or grant permission (by license or otherwise) to any other Person to represent,
state or imply, that any Branded Carbonated Soft Drinks or any concentrates or
emulsions used in the production of Branded Carbonated Soft Drinks incorporate,
are substantially identical to or are derived or developed from the Cott
Formulas or any product produced with the Cott Formulas (each, a "Cott
Restricted Business"); provided, however, that this Section 11.3(a) shall not be
deemed to prohibit Cott or its Affiliates from (x) using the Cott US Formulas
and derivatives thereof in the development, manufacture, sale or distribution of
carbonated soft drinks or concentrates or emulsions used in the production of
concentrates, which concentrates or emulsions are used in the production of
carbonated soft drinks, in each case which are sold under the Cott Marks or
trademarks substantially similar to the Cott Marks or (y) using the Cott Current
Formulas in the development, manufacture, sale or distribution of concentrates
or emulsions used in the production of the carbonated soft drinks listed on
Schedule 11.3(a) or brand extensions thereof.
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(b) Beginning on the Closing Date and continuing thereafter without
limitation, Cott and its Affiliates shall only use the RC International Branded
Formulas and any derivative thereof for the development, manufacture, sale or
distribution of carbonated soft drinks under the RC International Current Marks,
any marks substantially similar to the RC International Current Marks or marks
otherwise incorporating the "RC" brand or, in each case, brand extensions
thereon inside the Territory. Without limiting the foregoing and for purposes of
clarification, beginning on the Closing Date and continuing thereafter without
limitation, neither Cott nor any Affiliate of Cott shall, under any
circumstances (i) use, authorize the use by any other Person of, or grant
permission (by license or otherwise) to any other Person to use, the RC
International Branded Formulas or any derivative thereof in the development,
manufacture, sale or distribution, anywhere in the world, of concentrates or
emulsions used in the production of concentrates, which concentrates and
emulsions are used in the production of Private Label Soft Drinks; nor (ii)
represent, state or imply, or authorize or grant permission (by license or
otherwise) to any other Person to represent, state or imply, that any Private
Label Soft Drinks or any concentrates or emulsions used in the production of
Private Label Soft Drinks incorporate, are substantially identical to or are
derived or developed from the RC International Branded Formulas or any product
produced with the RC International Branded Formulas (each, an "RC International
Restricted Business").
(c) The RC International Intellectual Property acquired by Buyers
hereunder (including, without limitation, the RC International Marks, the RC
International Formulas and all RC International Formula Information) have been
acquired by Cott and its Affiliates only in the Territory and may not be used by
Cott or any Affiliate, or any other Person authorized by or granted permission
(by license or otherwise) by Cott or any of its Affiliates, by license or
otherwise, outside the Territory. Cott agrees that, from and after the Closing
Date, neither it nor any of its Affiliates shall authorize or grant permission
(by license or otherwise) to any other Person to, develop, manufacture, sell or
otherwise distribute any products incorporating, derived from or otherwise using
any of the RC International Intellectual Property (i) outside the Territory
(other than the use of the RC International Formulas in the production of
concentrates, or emulsions used in the development and production of such
concentrates, at the Owned Real Property or elsewhere) or (ii) inside the
Territory if Cott or any of its Affiliates has reason to believe that such
products will ultimately be sold or distributed outside the Territory. Cott
further agrees to expressly prohibit any such activity outside the Territory and
the conduct of any Cott Restricted Business or RC International Restricted
Business in any franchise, license, distribution or other agreement entered into
by Cott or any of its Affiliates with any other Person and to use all reasonable
efforts to enforce such prohibitions in respect of any direct or indirect
violations thereof by itself, any Affiliate or any such other Person. Seller
acknowledges that Cott is currently a franchisee of the RC Domestic Business in
Canada and that so long as Cott is such a franchisee, the foregoing shall not
restrict Cott's rights under any agreements related thereto.
(d) From and after the Closing Date, neither Cott nor any of its
Affiliates shall register any second level domain name that includes any of the
RC International Marks in any generic top level domains (gTLDs) unless the
second level domain name includes a geographic
43
designator indicating a country that is within the Territory. Cott and its
Affiliates may register any second level domain name consisting solely of a RC
International Xxxx without a geographic designator indicating a country that is
within the Territory only in the two-letter country code top level domains
(ccTLDs) that specifically correlate to a country that is within the Territory.
Neither Cott nor any of its Affiliates shall register any second level domain
name that includes any of the RC International Marks with any two-letter country
code top level domains (ccTLDs) for any country that is not within the
Territory.
(e) Buyers acknowledge that, outside of the Territory, Seller shall retain
ownership of, and Seller and its Affiliates shall have the right to use, subject
to the provisions of Section 11.2, any of the RC International Formulas (and
related RC International Formula Information) that as of the Closing Date are
used in both the RC International Business and the RC Domestic Business.
(f) Nothing contained in this Section 11.3 shall restrict Cott and its
Affiliates from developing, manufacturing, selling or distributing, or
authorizing any other Person to, or granting permission (by license or
otherwise) to any other Person to, develop, manufacture, sell or distribute any
Private Labels that are derived from the Cott Formulas, whether or not the Cott
Formulas are derived from the RC International Formulas or the RC Domestic
Formulas. Nothing contained herein shall be deemed an admission by Cott or
Seller that any of the Cott Formulas are or were derived from the RC Domestic
Formulas.
11.4 PURCHASERS.
(a) In the event that Cott is sold or divested (whether through a sale of
assets or equity interests, acquisition, merger, consolidation, business
combination, legislation, joint venture, license or otherwise), Cott covenants
and agrees that as a condition of such sale or divestiture, the surviving
corporation (whether or not Cott) or the acquiring party (in the case of an
asset transfer) shall covenant and agree to be bound by the provisions of
Sections 11.1(c), 11.3 and, with respect to any subsequent sale or divestiture,
this Section 11.4(a). In the event that the RC International Business is sold or
divested (whether through a sale of assets or equity interests, acquisition,
merger, consolidation, business combination, legislation, joint venture, license
or otherwise) or any of the RC International Formulas are sold, Cott covenants
and agrees that as a condition of such sale or divestiture, the surviving
corporation (whether or not Cott) or the acquiring party (in the case of an
asset transfer) shall covenant and agree to be bound by the provisions of
Sections 11.1(c) (solely insofar as it applies to the RC International Formulas
and the RC International Formula Information), 11.3(b), 11.3(c) and 11.3(d) and,
with respect to any subsequent sale or divestiture, this Section 11.4(a). In the
event that the Cott Business is sold or divested (whether through a sale of
assets or equity interests, acquisition, merger, consolidation, business
combination, legislation, joint venture, license or otherwise) or any of the
Cott Formulas are sold, Cott covenants and agrees that as a condition to such
sale or divestiture, the surviving corporation (whether or not Cott) or the
acquiring party (in the case of an asset transfer) shall covenant and agree to
be bound by the provisions of Sections 11.1(c) (solely
44
insofar as it applies to the Cott Formulas) and 11.3(a) and the last sentence of
Section 11.3(c) and, with respect to any subsequent sale or divestiture, this
Section 11.4(a). Cott further covenants and agrees that any agreement or
agreements for any sale or divestiture contemplated by this Section 11.4(a)
shall explicitly provide that Seller shall be a third party beneficiary of the
agreements of the surviving corporation (whether or not Cott) or the acquiring
party to the matters set forth in this Section 11.4(a) and that such covenants
and agreement shall be specifically enforceable by Seller (in addition to any
other remedies at law or equity that Seller may then have). Promptly before such
sale or divestiture, Cott shall notify Seller in writing of such sale or
divestiture and shall provide Seller with all documents and instruments (or
extracts thereof) reasonably requested by Seller to evidence Cott's compliance
with this Section 11.4(a).
(b) In the event that Seller is sold or divested (whether through a sale
of assets or equity interests, acquisition, merger, consolidation, business
combination, legislation, joint venture, license or otherwise), Seller covenants
and agrees that as a condition of such sale or divestiture, the surviving
corporation (whether or not Seller) or the acquiring party (in the case of an
asset transfer) shall covenant and agree to be bound by the provisions of
Section 11.1(c), 11.2 and, with respect to any subsequent sale or divestiture,
this Section 11.4(b). In the event that the RC Domestic Business is sold or
divested (whether through a sale of assets or equity interests, acquisition,
merger, consolidation, business combination, legislation, joint venture, license
or otherwise) or any of the RC Domestic Formulas are sold, Seller covenants and
agrees that as a condition of such sale or divestiture, the surviving
corporation (whether or not Seller) or the acquiring party (in the case of an
asset transfer) shall covenant and agree to be bound by the provisions of
Sections 11.1(c) (solely insofar as it applies to any RC International Formulas
(and related RC International Formula Information) that are used in the RC
Domestic Business), 11.2(a), 11.2(c), 11.2(d) and, with respect to any
subsequent sale or divestiture, this Section 11.4(b). Seller further covenants
and agrees that any agreement or agreements for any sale or divestiture
contemplated by this Section 11.4(b) shall explicitly provide that Cott shall be
a third party beneficiary of the agreements of the surviving corporation
(whether or not Seller) or the acquiring party to the matters set forth in this
Section 11.4(b) and that such covenants and agreement shall be specifically
enforceable by Cott (in addition to any other remedies at law or equity that
Cott may then have). Promptly before such sale or divestiture, Seller shall
notify Cott in writing of such sale or divestiture and shall provide Cott with
all documents and instruments (or extracts thereof) reasonably requested by Cott
to evidence Seller's compliance with this Section 11.4(b).
11.5 REMEDIES.
(a) The parties hereto recognize that the Laws and public policies of the
various applicable jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth in Sections 11.1, 11.2,
11.3 and 11.4. It is the intention of the parties that the provisions of
Sections 11.1, 11.2, 11.3 and 11.4 be enforced to the fullest extent permissible
under the Laws and policies of each jurisdiction in which enforcement may be
sought, and that the unenforceability (or the modification to conform to such
Laws or policies) of any provisions
45
of Sections 11.1, 11.2, 11.3 and 11.4 shall not render unenforceable or impair
the remainder of the provisions of Sections 11.1, 11.2, 11.3 and 11.4.
Accordingly, if at the time of enforcement of any provision of Sections 11.1,
11.2, 11.3 and 11.4, a court of competent jurisdiction holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographic area
reasonable under such circumstances will be substituted for the stated period,
scope or geographical area and that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and
geographical area permitted by Law.
(b) The parties hereto expressly acknowledge that the restrictive covenants
set forth in Sections 11.1, 11.2, 11.3 and 11.4, including without limitation
the geographic scope and duration of such covenants, are necessary in order to
protect and maintain the proprietary interests and other legitimate business
interests of the parties hereto, and that any violation thereof by either Seller
or Cott would result in irreparable injuries to the other that would not be
readily ascertainable or compensable in terms of money, and therefore such
non-breaching party shall be entitled to obtain from any court of competent
jurisdiction temporary, preliminary and permanent injunctive relief as well as
damages, which rights shall be cumulative and in addition to any other rights or
remedies to which it may be entitled. Seller and Cott further agree that if it
is determined that the other has willfully breached the terms of any or all of
the provisions of Sections 11.1, 11.2, 11.3 and 11.4, the non-breaching party
hereto shall be entitled to recover from such breaching party all costs and
reasonable attorneys' fees incurred as a result of its attempts to redress such
breach or to enforce its rights and protect its legitimate interests.
11.6 EMPLOYEES.
(a) Cott shall offer employment as of the Closing Date to each Employee
listed on Schedule 4.8. Each Employee who accepts Cott's offer of employment is
hereinafter referred to
46
as a "Transferred Employee. " From and after the Closing, Cott shall assume
responsibility for all salary, severance, bonus obligations and employee
benefits (excluding retention bonuses for any Transferred Employee listed on
Schedule 4.8) with respect to the Transferred Employees that become payable
after the Closing. Seller shall remain responsible for all salary, severance,
bonus obligations and employee benefits (including retention bonuses for any
Transferred Employees listed on Schedule 4.8) with respect to the Transferred
Employees that became payable on or prior to the Closing.
(b) For the one-year period beginning on the Closing Date and ending on the
first anniversary thereof, Cott shall provide each Transferred Employee with
salary, severance, bonus and employee benefits that are no less favorable, in
the aggregate, than those made available by Seller as of the date hereof to such
Transferred Employee. Without limiting the foregoing, Cott shall cause each
Transferred Employee (and his or her eligible dependents) to be covered on and
following the Closing Date by a group health plan that provides health benefits
(within the meaning of Section 5001(b)(1) of the Code) that does not limit or
exclude coverage on the basis of any preexisting condition of such Transferred
Employee or dependent. To the extent that service is relevant for eligibility
and vesting (and with respect to benefit accruals, solely for purposes of
calculating entitlement to severance, vacation and sick days) under any
retirement plan, employee benefit plan, program or arrangement established or
maintained by Cott or any of its Affiliates for the benefit of the Transferred
Employees, such plan, program or arrangement shall credit such Transferred
Employees (i) for service on or prior to the Closing with Seller or any
Affiliate thereof or predecessor of either such entity in the same manner and to
the same extent that prior service is credited for service rendered to the
Seller and (ii) full credit, for the year in which the Closing Date occurs, with
any deductible already incurred by a Transferred Employee under Seller's group
health plan and with any other out-of-pocket expenses that count against any
maximum out-of-pocket expense provision of any group health plan of Cott under
which Transferred Employees are covered. Seller shall remain responsible for all
claims incurred by Transferred Employees prior to the Closing Date under
Seller's group health plans and Cott shall be responsible for all claims
incurred on or after the Closing under its group health plans. For purposes of
clarity, a claim shall be considered incurred when the treatment for a given
condition is provided, and not when the condition arose.
(c) Cott shall assume responsibility for all payroll obligations (including
without limitation the satisfaction of all payroll withholding tax obligations)
for the Transferred Employees for all payroll periods ending after the Closing.
If the Closing takes place on a day such that a payroll period begins on or
prior to the Closing Date and ends after the Closing Date (such payroll period,
a "Straddle Period"), then Seller shall promptly reimburse Cott for Seller's
proportionate share of the salaries, wages and payroll taxes (reduced by all
amounts that Seller or its Affiliates otherwise would have withheld for benefit
plan coverages for Seller's portion of such Straddle Period) for the Transferred
Employees for such Straddle Period, such proportionality to be determined on the
basis of the number of working days occurring from the start of such Straddle
Period to and including the Closing Date relative to the total number of working
days in such Straddle Period. After Cott has satisfied all such payroll
obligations with respect to the Straddle Period, Cott shall notify Seller of the
aggregate amount of such payroll obligations. Promptly after its receipt of such
notice, Seller shall pay to Cott the amount due to Buyer pursuant to this
Section 11.6(c).
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(d) For purposes of the COBRA health care continuation coverage provisions
contained in Section 4980B of the Code and the corresponding provisions of ERISA
(the "COBRA Provisions"), the Transferred Employees shall be considered to have
separated from service with Seller or its Affiliates on the Closing Date.
Following the Closing, Seller or its Affiliates shall timely provide the
Transferred Employees with the notice required under the COBRA Provisions for
employees who lose group health plan coverage due to a termination of
employment. No group health plan maintained by Cott shall constitute a
"successor plan" to any group health plan maintained by Seller or its Affiliates
and Cott shall not be considered a "successor employer" with respect to the
Employees (both within the meaning of the COBRA Provisions). Notwithstanding the
foregoing, Cott shall be solely responsible for providing COBRA health care
continuation coverage to any Transferred Employees who incur a "qualifying
event" (within the meaning of the COBRA Provisions) after the Closing.
(e) The parties hereto agree that, if requested by Seller within sixty (60)
days following the Closing, repayment of outstanding loans under the CBI
Holdings Inc. Employees' Savings Incentive Plan ("Seller's 401(k) Plan") shall
be facilitated by Cott withholding the appropriate loan repayment amount (which
amount shall be timely provided to Cott) from the pay of each Transferred
Employee who has a loan outstanding under Seller's 401(k) Plan and transferring,
pursuant to instructions provided by Seller, such amount to the administrator or
trustee of Seller's 401(k) Plan. Cott shall allow any Transferred Employee who
elects to take an eligible rollover distribution from Seller's 401(k) Plan to
make a direct rollover contribution to a defined contribution plan maintained by
Cott of any promissory note distributed in conjunction with such eligible
rollover distribution.
(f) Seller shall, as soon as reasonably practicable following the date
hereof, but in any event not later than ten (10) Business Days prior to the
Closing, deliver to Cott the information regarding the Employees that has been
reasonably requested by Cott on or prior to the date hereof and not yet
delivered by Seller.
11.7 MAIL AND OTHER COMMUNICATIONS. After the Closing, Seller shall
promptly remit to Cott any checks, cash, payments, mail or other communications
relating to the RC International Business, the Cott Business, the Assets and the
Assumed Liabilities that are received by Seller after the Closing Date, except
to the extent the same relates to the Excluded Assets or the Retained
Liabilities, with checks, cash and payments being forwarded to Cott's bank
account within five (5) Business Days after receipt and mail or other
communications being forwarded to Cott within two (2) Business Days after
receipt. After the Closing, Buyers shall promptly remit to Seller any checks,
cash, payments, mail or other communications relating to the Excluded Assets and
the Retained Liabilities that are received by Buyer after the Closing Date,
except to the extent the same relates to the Assets or the Assumed Liabilities,
with checks, cash and payments being forwarded to Seller's bank account within
five (5) Business Days after receipt and mail or other communications being
forwarded to Seller within two (2) Business Days after receipt.
11.8 FURTHER ACTION.
(a) From and after the Closing Date, each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably
48
required to carry out the provisions of this Agreement and the Ancillary
Agreements and to give effect to the transactions contemplated hereby and
thereby. Without limiting the foregoing, from and after the Closing, (i) Seller
shall do all things necessary, proper or advisable under applicable Laws as
reasonably requested by Cott to put the appropriate Buyer in effective
possession, ownership and control of the Assets and any other assets or
properties of Seller or its Affiliates that relate solely to the operation of
the RC International Business or the Cott Business or the Owned Real Property
that were not transferred to Buyers hereunder and each Buyer shall cooperate
with Seller for that purpose, and Seller shall provide reasonable assistance to
the applicable Buyer in securing the transfer or reissuance of permits and
certificates of Governmental Authorities reasonably necessary to conduct the RC
International Business or the Cott Business, as the case may be, and (ii) Buyers
shall do all things necessary, proper or advisable under applicable Laws as
reasonably requested by Seller to put Seller (or such other Person as Seller
shall indicate) in effective possession, ownership and control of the Excluded
Assets and Seller shall cooperate with Buyers for that purpose.
(b) Subject to Section 11.1(b), Seller shall have the right to retain
copies of all books and records of the RC International Business and the Cott
Business delivered by Seller to Cott relating to periods ending on or prior to
the Closing Date. For a period of ten years from the date hereof, Buyers shall
maintain all books and records of the RC International Business and the Cott
Business delivered by Seller relating to periods ending on or prior to the
Closing Date and shall make them and any other relevant books and records
(subject to any confidentiality restrictions imposed on Buyers regarding such
materials), and any individuals responsible for the preparation and maintenance
of such books and records, available to Seller, subject to Section 11.1(b), as
may be requested by Seller from time to time, including, without limitation, in
connection with any action, case or proceeding by or against Seller or any of
its Affiliates. If, at any time after the Closing, Seller requires a copy of any
such book or record, it shall have the right to promptly obtain a copy thereof
(at the Seller's cost) from Buyers. Seller shall make all relevant books and
records in its possession (subject to any confidentiality restrictions imposed
on Seller regarding such materials), and any individuals responsible for the
preparation and maintenance of such books and records, available to Buyers,
subject to Section 11.1(b), as may be requested by Buyers from time to time, in
connection with any action, case or proceeding by or against any Buyer or any
Affiliate of any Buyer.
(c) If, as of the date hereof, any bottle designs are used both in the RC
Domestic Business and the RC International Business and are owned by Seller or
any Affiliate of Seller, Seller or such Affiliate shall at the Closing grant
Cott or the applicable Buyer a perpetual, royalty-free license, freely
assignable in connection with a sale of the RC International Business, but with
no representations as to the quality of Seller's or such Affiliate's title to
such designs, registration of such designs with Governmental Authorities or
infringement on the use by it or its infringement of the rights of others with
respect to such designs, to use such bottle designs on such additional terms and
conditions as the parties shall agree both acting reasonably and in good faith.
11.9 EXPENSES AND FINDER'S FEES. Seller, on the one hand, and Cott (with
respect to all Buyers), on the other hand, shall each bear their own expenses
(including without limitation legal fees and expenses, accountants' or financial
advisors' fees and expenses and fees due to any broker, investment banker,
finder or agent) incurred in connection with the negotiation,
49
execution and performance of this Agreement. Cott shall pay all transfer Taxes
or other fees related to the sale of the Assets hereunder and the fees and costs
of recording or filing all applicable conveyancing instruments associated with
the transfer of the Assets from Seller to Buyers pursuant to this Agreement.
Seller and each applicable Buyer shall cooperate in the preparation, execution
and filing of all Tax Returns regarding any transfer Taxes which become payable
as a result of the transfer of the Assets from Seller to a Buyer pursuant to
this Agreement and/or shall cooperate to seek an available exemption from such
Taxes.
11.10 ACCOUNTS RECEIVABLE. No later than the Closing Date, Seller shall
provide Cott with a true and complete list of the RC International Accounts
Receivable and the Cott Accounts Receivable as of a date no earlier than fifteen
calendar days prior to the Closing Date, in each case indicating the name of the
payor and the amount outstanding. Within five (5) Business Days immediately
following the Closing Date, Seller shall provide Cott with an updated list, as
of the Closing Date, of the information specified in the immediately preceding
sentence.
11.11 BULK SALES LAWS. Buyers hereby waive compliance by Seller with the
provisions of any bulk sales, bulk transfer or similar Laws.
11.12 INTERPRETATION. Cott and each other Buyer acknowledges and confirms
that for purposes of this Agreement, the term "Encumbrances" shall not include
Seller's ownership of, and the right of Seller and its Affiliates to use, the RC
International Formulas (and related RC International Formula Information) which
are used as of the date of the Closing in both the RC International Business and
the RC Domestic Business outside the Territory in accordance with Section
11.3(e).
ARTICLE XII
GENERAL
12.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
shall having the following meanings:
"Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such specified
Person.
"Agreed Rate" has the meaning set forth in Section 2.3(e).
"Agreement" has the meaning set forth in the preamble hereto.
"Allocation Schedule" has the meaning set forth in Section 2.2.
"Ancillary Agreements" means the Xxxx of Sale, Assumption Agreement,
Copyright Assignment, Trademark Assignment, Termination Agreement, Deed,
FIRPTA Certificate, Transitional Services Agreement, Settlement Termination
Agreement, License Assignment Agreement and all other certificates or
documents to be delivered pursuant to this Agreement.
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"Assets" has the meaning set forth in Section 1.1.
"Assumed Contracts" means, collectively, the RC International Assumed
Contracts and the Cott Assumed Contracts.
"Assumed Liabilities" has the meaning set forth in Section 1.3(a).
"Assumption Agreement" has the meaning set forth in Section 3.2(d).
"Xxxx of Sale" has the meaning set forth in Section 3.2(c).
"Branded Carbonated Soft Drink" means a carbonated soft drink that is
marketed, distributed and positioned in substantially the same manner as the
products produced by the two major cola companies.
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
"Buyer Indemnified Parties" has the meaning set forth in Section 8.2(a).
"Buyers" means, collectively, Cott, BCB and any entity designated by Cott
prior to the Closing to be additional purchasers of any portion of the Assets
and to assume any of the Assumed Liabilities in accordance with Section 12.8(a);
provided, that nothing in this definition is intended to imply that Cott is or
will be the actual purchaser of any of the Assets or that it will assume any of
the Assumed Liabilities.
"Claim Notice" has the meaning set forth in Section 8.4(a).
"Closing Date" has the meaning set forth in Section 3.1.
"Closing" has the meaning set forth in Section 3.1.
"COBRA Provisions" has the meaning set forth in Section 11.6(d).
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations issued thereunder, each as amended from time to time.
"Commitment Letter" has the meaning set forth in Section 7.5.
"Common Inventory" means, collectively, finished concentrates and emulsions
and raw and packaging materials and work in process, in each case which are
usable in the RC International Business, the RC Domestic Business and the Cott
Business (or any combination thereof) and in the possession or control of
Seller.
"Confidentiality Agreement" has the meaning set forth in Section 11.1(a).
"Contract" means any agreement, lease, evidence of indebtedness, mortgage,
indenture, security agreement or other contract, commitment or obligation, in
each case, whether written or oral.
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"Control" means, as to any Person, the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by Contract or otherwise. The term "Controlled"
shall have a correlative meaning.
"Copyright Assignment" has the meaning set forth in Section 3.2(f).
"Cott" has the meaning set forth in the preamble hereto.
"Cott Accounts Receivable" has the meaning set forth in Section 1.1(b)(vi).
"Cott Additional Formulas" has the meaning set forth in Section
1.1(b)(i)(B)(ii).
"Cott Agreement" means the letter agreement dated January 28, 1994 between
Royal Crown Cola Co. and Cott, as amended or supplemented from time to time,
including, without limitation, by two letter agreements dated July 26, 1996 and
two letter agreements dated February 11, 1997 and the Assumption Agreement dated
January 2, 2000.
"Cott Assets" has the meaning set forth in Section 1.1(b).
"Cott Assumed Contracts" has the meaning set forth in Section 1.1(b)(v).
"Cott Business" has the meaning set forth in the recitals hereto.
"Cott Cap" has the meaning set forth in Section 8.2(b).
"Cott Current Concentrates" means the cola and non-cola concentrates, and
cola and non-cola emulsions used in the production of concentrates, that are
currently supplied by Seller to the Cott Group pursuant to the Cott Agreement.
"Cott Current Formulas" has the meaning set forth in Section
1.1(b)(i)(B)(i).
"Cott Employee Plan" means each material "employee benefit plan" (within
the meaning of Section 3(3) of ERISA) and each bonus, incentive or deferred
compensation, severance, termination, retention, change of control, stock
option, stock appreciation, stock purchase, phantom stock or other equity-based,
performance or other employee or retiree benefit or compensation plan, program,
arrangement, agreement or policy maintained by Seller that provides benefits or
compensation in respect of any employee currently employed by Seller in the Cott
Business.
"Cott Formula Information" has the meaning set forth in Section
1.1(b)(i)(B).
"Cott Formulas" has the meaning set forth in Section 1.1(b)(i)(B).
"Cott Group" means Cott and all of its Affiliates.
"Cott Intellectual Property" has the meaning set forth in Section
1.1(b)(i).
"Cott MAE" means any change or effect that, singly or in the aggregate, is
materially adverse to the operations and conduct of the Cott Business or the
Cott Assets taken as
52
a whole; provided, however, that a Cott MAE shall exclude any change or effect
due to (i) general economic or industry-wide conditions in any country in the
Territory, (ii) any change resulting from this Agreement or the public
announcement thereof or the transactions contemplated hereby or (iii) any
condition described in the Disclosure Schedule.
"Cott Marks" has the meaning set forth in Section 1.1(b)(i)(A).
"Cott Material Assumed Contracts" has the meaning set forth in Section 6.7.
"Cott Products" means all private label and Cott Group proprietary label
carbonated soft drinks produced, bottled or sold by or on behalf of the Cott
Group which are sold to retailers, wholesalers and distributors for re-sale to
consumers in bottles, cans or other containers and which are produced from Cott
Current Concentrates.
"Cott Restricted Business" has the meaning set forth in Section 11.3(a).
"Cott Settlement Agreement" means the agreement effective November 27, 1996
between CBI Holdings, Inc., Cott and Cott Beverages USA Inc.
"Cott US Concentrates" means the cola and non-cola concentrates, and cola
and non-cola emulsions used in the production of concentrates currently in
commercial use solely in connection with the Lutheran License.
"Cott US Formulas" has the meaning set forth in Section 1.1(b)(i)(B)(iii).
"Cott USA Trademark License Agreement" means the Trademark License
Agreement, dated December 20, 1991, between Cott U.S.A., a division of Cadbury
Beverages Inc. (inadvertently shown as being signed by Cott Beverages Inc.) and
Canada Dry Bottling Company of New York.
"Deed" has the meaning set forth in Section 3.2(h).
"Disclosure Schedule" has the meaning set forth in Section 4.9.
"Dispute Period" has the meaning set forth in Section 8.4(a).
"Employees" has the meaning set forth in Section 4.8.
"Encumbrances" has the meaning set forth in Section 1.1.
"Environment" means all air, surface water, groundwater, or land, including
land surface or subsurface, including all fish, wildlife, biota and all other
natural resources.
"Environmental Claims" means any and all administrative or judicial
actions, suits, orders, written claims, liens, written notices, written notices
of violations, written complaints, written requests for information or
proceedings, in each case whether criminal or civil, pursuant to or relating to
any applicable Environmental Law or any common law doctrine relating to the
presence of, Release of or exposure to a Hazardous Material by any Person
53
(including but not limited to any Governmental Authority, private person and
citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the Environment, of any Hazardous Materials at any
location, including but not limited to any location to which Hazardous Materials
or materials containing Hazardous Materials were sent for handling, storage,
treatment, or disposal.
"Environmental Clean-up Site" means any location which is listed or
proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened action, suit, proceeding, or investigation
related to or arising from any alleged violation of any Environmental Law.
"Environmental Conditions" means those matters or conditions identified in
the Phase II that (i) constitute a violation of applicable Environmental Law,
(ii) require remediation under applicable Environmental Law or (iii) require
further investigation to determine if such matters or conditions constitute a
violation of applicable Environmental Law or require remediation under
applicable Environmental Law.
"Environmental Law" means any and all applicable civil and criminal laws,
statutes, ordinances, orders, codes, rules, regulations, Environmental Permits,
binding policies, binding guidance documents, judgments, decrees or injunctions
of any Governmental Authority, relating to the protection of the Environment,
and/or governing the handling, use, generation, treatment, storage,
transportation, disposal, manufacture, distribution, formulation, packaging,
labeling, or Release of Hazardous Materials, whether now existing or
subsequently amended or enacted, including but not limited to: the Clean Air
Act, 42 U.S.C. ss. 7401 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Hazardous Material
Transportation Act 49 U.S.C. ss. 1801 et seq.; the Federal Insecticide,
Fungicide and Rodenticide Act 7 U.S.C. ss. 136 et seq.; the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss. 6901 et seq.; the
Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Occupational
Safety & Health Act of 1970, 29 U.S.C. ss. 651 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. ss. 2701 et seq.; and the state analogies thereto, including the
Georgia Hazardous Sites Response Act, OCGA 12-8-90 et seq., and the Georgia
Asbestos Safety Act, OCGA 12-12-1 et seq., all as amended or superseded from
time to time.
"Environmental Permit" means any permits, licenses, approvals, consents or
authorizations required by any Governmental Authority under or in connection
with any Environmental Law.
"Environmental Remedial Costs" means the total reasonable estimated costs
of remediating or correcting all Environmental Conditions, as determined
pursuant to and in accordance with the Remediation Agreement.
54
"Environmental Retained Liabilities" has the meaning set forth in Section
8.2(a)(i).
"ERISA" means the Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, each as amended from time to time.
"Excluded Assets" has the meaning set forth in Section 1.2.
"Final Working Capital Statement" has the meaning set forth in Section
2.3(b) or Section 2.3(c), as applicable.
"Financing" has the meaning set forth in Section 7.5.
"FIRPTA Certificate" has the meaning set forth in Section 3.2(i).
"Formula Information" means the RC International Formula Information and
the Cott Formula Information, collectively.
"Formulas" means the RC International Formulas and the Cott Formulas,
collectively.
"Ft. Lauderdale Lease" means the Commercial Office Sub-Lease, dated as of
October 2000, between Arby's, Inc. and RCAC, LLC and Seller, as amended by a
Sub-Lease Amendment dated March 19, 2001.
"Governmental Authority" means any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal or judicial or arbitral body.
"Guaranty" has the meaning set forth in Section 3.2(n).
"Hazardous Material" means petroleum, petroleum hydrocarbons or petroleum
products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous materials," "hazardous wastes,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "pollutants," "regulated substances," "solid wastes," or
"contaminants" or words of similar import, under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Indemnified Party" has the meaning set forth in Section 8.4.
"Indemnifying Party" has the meaning set forth in Section 8.4(a).
55
"Indemnity Notice" has the meaning set forth in Section 8.4(b).
"Independent Accounting Firm" means (a) an independent certified public
accounting firm in the United States of international recognition mutually
acceptable to Seller and Cott or (b) if Seller and Cott are unable to agree upon
such a firm, then each party shall select one such firm as described in (a) and
those two firms shall select a third firm, in which event "Independent
Accounting Firm" shall mean such third firm.
"Information Technology" has the meaning set forth in Section 1.2(e).
"Initial Working Capital Statement" has the meaning set forth in Section
2.3(a).
"Intellectual Property" means, collectively, the RC International
Intellectual Property and the Cott Intellectual Property.
"Inventory" means the inventory and supplies described in Sections
1.1(a)(iii)(A), (C) and (D) and Section 1.1(b)(iii), exclusive of the inventory
and supplies described in Section 1.2(d).
"Joinder Agreements" has the meaning set forth in Section 3.3(l).
"Knowledge of Buyers" or any similar phrase means, the knowledge of any of
Xxxx Xxxxxxxxxx, Xxx Xxxxxxx and Xxxx Xxxxxxxx, in each case after assuming that
such individual has made reasonable inquiry, including of Xxxx Xxxx and
Xxxxxxxxxxx Xxxxxxxx, as appropriate, in light of the particular circumstances.
"Knowledge of Seller" or any similar phrase means, in the case of the RC
International Business or the Cott Business, the knowledge of any of Xxxx Xxxx,
Xxxx Reckitt, Xxxxx Xxxxxxxx, Xxxx Xxxxx, Xxxxx XxXxxxxxx and Xxxx Xxxxxxx and,
in addition, in the case of the RC International Business, the knowledge of any
of Xxxxx Xxxxx, Xxx Xxxxxx and Xxx Xxxxxxxx, in each case after assuming that
such individual has made reasonable inquiry, in light of the particular
circumstances.
"Law" means any United States federal, state or local or any foreign
statute, law, ordinance, regulation, rule, code, order, other requirement or
rule of law.
"License Agreement" has the meaning set forth in Section 3.2(o).
"License Assignment Agreement" has the meaning set forth in Section 3.2(m).
"Litigation" has the meaning set forth in Section 4.3.
"Losses" has the meaning set forth in Section 8.2(a).
"Lutheran License" means the Cott License Agreement dated as of January 2,
1998 between Xx Xxxxxx/Seven Up, Inc. and Beverage Management Group, Inc., as
amended.
"Marks" means, collectively, the RC International Marks and the Cott Marks.
56
"Material Assumed Contracts" means the RC International Material Assumed
Contracts and the Cott Material Assumed Contracts, collectively.
"Notice of Disagreement" has the meaning set forth in Section 2.3(b).
"Order" means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.
"Owned Real Property" has the meaning set forth in Section 1.1(b)(vii).
"Permitted Encumbrances" means (i) Encumbrances for inchoate mechanics' and
materialmen's liens and inchoate workmen's, repairmen's, warehousemen's and
carriers' liens arising in the ordinary course of either the RC International
Business or the Cott Business, (ii) Encumbrances for Taxes and other liabilities
not yet due and payable or being contested in good faith, (iii) Encumbrances
with respect to the Owned Real Property set forth on Schedule 12.1 hereto, (iv)
imperfections of title the existence of which do not materially detract from the
value of, materially interfere with, or otherwise materially adversely affect
the use and enjoyment of such property, consistent with past practice, subject
thereto or affected thereby, and (v) solely with respect to the Owned Real
Property, (A) conditions, easements, rights of way and other similar
restrictions that may be shown by a current survey, title report or physical
inspection which do not in the reasonable discretion of Cott materially detract
from the value of, materially interfere with, or otherwise materially adversely
affect the use and enjoyment of the Owned Real Property consistent with past
practice, and (B) zoning, building and other similar restrictions imposed by
applicable Law.
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, joint venture, joint stock company,
trust, firm, association, unincorporated organization or other legal entity.
"Phase II" means the final written assessment of the Phase II site
assessment to be conducted at and in respect of the Owned Real Property pursuant
to and in accordance with the Remediation Agreement.
"Private Label Soft Drinks" means carbonated soft drinks produced for a
specific retailer and/or wholesaler or a defined group of retailers and/or
wholesalers, bearing a brand name owned by, exclusively licensed to, or
otherwise exclusively associated with such retailer and/or wholesaler or group
of retailers and/or wholesalers.
"Purchase Price" has the meaning set forth in Section 2.1.
"RC Domestic Business" means the business conducted by Seller of
manufacturing, marketing and selling, outside the Territory, certain carbonated
beverage products under the RC Domestic Marks.
"RC Domestic Formula Information" has the meaning set forth in Section
1.2(f).
"RC Domestic Formulas" has the meaning set forth in Section 1.2(f).
57
"RC Domestic Marks" means the trademarks, trademark rights, trade dress,
service marks, service xxxx rights, brand names, trade names and trade name
rights, service names and service name rights and business and product names
currently used in the RC Domestic Business or corresponding to the RC
International Marks.
"RC International Accounts Receivable" has the meaning set forth in Section
1.1(a)(vi).
"RC International Additional Formulas" has the meaning set forth in Section
1.1(a)(i)(F)(iii).
"RC International Additional Marks" has the meaning set forth in Section
1.1(a)(i)(B).
"RC International Assets" has the meaning set forth in Section 1.1(a).
"RC International Assumed Contracts" has the meaning set forth in Section
1.1(a)(v).
"RC International Branded Concentrates" means the cola and non-cola
concentrates, and cola and non-cola emulsions used in the production of
concentrates, produced by or on behalf of Seller and currently in commercial use
in the RC International Business and sold under the RC International Current
Marks.
"RC International Branded Formulas" has the meaning set forth in Section
1.1(a)(i)(F)(i).
"RC International Business" has the meaning set forth in the recitals
hereto.
"RC International Cap" has the meaning set forth in Section 8.2(b).
"RC International Copyrights" has the meaning set forth in Section
1.1(a)(i)(E).
"RC International Current Marks" has the meaning set forth in Section
1.1(a)(i)(A).
"RC International Employee Plan" means each material "employee benefit
plan" (within the meaning of Section 3(3) of ERISA) and each bonus, incentive or
deferred compensation, severance, termination, retention, change of control,
stock option, stock appreciation, stock purchase, phantom stock or other
equity-based, performance or other employee or retiree benefit or compensation
plan, program, arrangement, agreement or policy maintained by Seller that
provides benefits or compensation in respect of any employee currently employed
by Seller in the RC International Business.
"RC International Formula Information" has the meaning set forth in Section
1.1(a)(i)(F).
"RC International Formulas" has the meaning set forth in Section
1.1(a)(i)(F).
58
"RC International Intellectual Property" has the meaning set forth in
Section 1.1(a)(i).
"RC International MAE" means any change or effect that, singly or in the
aggregate, is materially adverse to the operations and conduct of the RC
International Business or the RC International Assets taken as a whole;
provided, however, that an RC International MAE shall exclude any change or
effect due to (i) general economic or industry-wide conditions in any country in
the Territory, (ii) any change resulting from this Agreement or the public
announcement thereof or the transactions contemplated hereby or (iii) any
condition described in the Disclosure Schedule.
"RC International Material Assumed Contracts" has the meaning set forth in
Section 5.7.
"RC International Marks" has the meaning set forth in Section 1.1(a)(i)(B).
"RC International Non-Branded Concentrates" means the cola and non-cola
concentrates, and cola and non-cola emulsions used in the production of
concentrates, produced by or on behalf of Seller and currently in commercial use
in the RC International Business exclusive of the RC International Branded
Concentrates.
"RC International Non-Branded Formulas" has the meaning set forth in
Section 1.1(a)(i)(F)(ii).
"RC International Restricted Business" has the meaning set forth in Section
11.3(b).
"Real Property" means any land, building, plant, structure and other
improvement, together with all fixtures, systems, facilities equipment and
articles of personal property attached or appurtenant to the foregoing and all
rights and agreements, easements, covenants, herediments and appurtenances which
benefit or pertain to the foregoing.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Material into the Environment.
"Remediation Agreement" has the meaning set forth in Section 9.6.
"Resolution Period" has the meaning set forth in Section 8.4(a)(iii).
"Retained Liabilities" has the meaning set forth in Section 1.3(b).
"Seller" has the meaning set forth in the preamble hereto.
"Seller Indemnified Parties" has the meaning set forth in Section 8.3.
"Seller's 401(k) Plan" has the meaning set forth in Section 11.6(e).
59
"Settlement Termination Agreement" has the meaning set forth in Section
3.2(l).
"Statement" has the meaning set forth in Section 5.5(a).
"Straddle Period" has the meaning set forth in Section 11.6(c).
"Tax Benefit" means any decrease in income Tax liability, or increase in
income Tax refund, recognized by the Indemnified Party in connection with the
item of Loss giving rise to an indemnification payment, based upon the income
Tax rate applicable to the Indemnified Party during the taxable year in which
such Loss is recognized, net of any increase in income Tax liability resulting
from the indemnification payment to the Indemnified Party with respect to such
Loss.
"Tax Returns" means all returns and reports (including elections,
declaration, disclosures, schedules, estimates and information returns) required
to be supplied to a Tax authority relating to Taxes.
"Taxes" means all foreign and domestic federal, state, local and other
income, sales, use, excise, franchise, business license, withholding, payroll
(including federal, state and local unemployment and workers' compensation
insurance) and property (real, personal and intangible) taxes or similar
assessments and custom duties, and any interest, penalties, fees, assessments
and other governmental charges of any kind imposed thereon.
"Termination Agreement" has the meaning set forth in Section 3.2(g).
"Territory" means any country or jurisdiction other than the United States
of America, Puerto Rico, Canada, Mexico, the U.S. Virgin Islands (Saint Xxxxxx,
Saint Xxxx and Saint Croix Islands), American Samoa, Xxxxx Islands, Xxxxxxx
Islands, Guam, Xxxxxx Islands, Xxxxxxxx Atoll, Kingman Reef, Midway Islands,
Northern Mariana Islands, Palmyra Atoll, Wake Islands, French Polynesia, New
Caledonia, Wallis, Fortuna and areas under the administration of the United
States of America (including military or governmental installations or agencies
worldwide).
"Third Party Claim" has the meaning set forth in Section 8.4(a).
"Trademark Assignment" has the meaning set forth in Section 3.2(e).
"Transferred Employees" has the meaning set forth in Section 11.6(a).
"Transitional Services Agreement" has the meaning set forth in Section
3.2(j).
"Websites" has the meaning set forth in Section 1.1(a)(i)(C).
"Working Capital" has the meaning set forth in Section 2.3(a).
12.2 WAIVER. Any failure of any Buyer to comply with any of its obligations
or agreements or to fulfill any conditions herein contained may be waived only
by a written waiver from Seller. Any failure of Seller to comply with any of its
obligations or agreements or to
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fulfill any conditions herein contained may be waived only by a written waiver
from Cott. Except as otherwise specified herein, no failure by either Seller or
any Buyer to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder by such party preclude any other or future exercise of that
right or any other right hereunder by that party.
12.3 NOTICES. All notices, requests or other communications required or
permitted hereunder shall be given in writing by hand delivery, overnight
courier or registered mail or certified mail, return receipt requested, postage
prepaid, to the party to receive the same at its respective address set forth
below, or at such other address as may from time to time be designated by such
party to the other in accordance with this Section 12.3:
If to Seller, to: Royal Crown Company, Inc.
c/o Xx Xxxxxx/Seven Up, Inc.
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxx, Esq.
with a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
If to any Buyer, to: Cott Corporation
000 Xxxxx'x Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxxx X. Xxxxxxxx, Esq.
with a copy to: Goodmans LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxxxxxx Xxxxx, Esq.
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the acknowledgment of receipt issued with respect
thereto by the applicable postal authorities or the signed acknowledgment of
receipt.
12.4 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies
under or by reason of this Agreement, other than Persons expressly entitled to
indemnification under Article VIII hereof; provided, however, that nothing in
this Section 12.4 shall affect any party's obligations under Section 11.4
hereof.
12.5 HEADINGS. Captions and paragraph headings used herein are for
convenience only, are not a part of this Agreement and shall not be used in
construing it.
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12.6 ENTIRE AGREEMENT. The making, execution and delivery of this Agreement
by the parties has been induced by no representations, statements, warranties or
agreements other than those herein expressed. This Agreement, together with the
schedules, other agreements and documents referred to herein, embodies the
entire understanding of the parties and there are no other agreements or
understandings, written or oral, in effect between the parties relating to the
subject matter hereof, except as specifically referenced herein. This Agreement
may be amended or modified only by a written instrument signed by Seller and
Cott. This Agreement supersedes and terminates all prior discussions,
negotiations, understandings, arrangements and agreements between the parties
relating to the subject matter hereof.
12.7 SEVERABILITY. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such provision or provisions shall be ineffective only to the
extent of such invalidity, illegality or unenforceability, without invalidating
the remainder of such provision or provisions or the remaining provisions of
this Agreement.
12.8 ASSIGNABILITY.
(a) Prior to the Closing, none of the parties hereto may assign this
Agreement; provided, however, that, subject to Section 9.5, upon written notice
to Seller given no later than ten (10) Business Days prior to the Closing, and
with the prior written consent of Seller which will not be unreasonably withheld
or delayed, Buyers may assign their right to acquire any portion of the Assets
and their obligations to assume any portion of the Assumed Liabilities to one or
more direct or indirect wholly-owned subsidiaries of Cott.
(b) After the Closing, neither Seller nor Cott nor the other Buyers hereto
may assign this Agreement without the prior written consent of Cott, in the case
of an assignment by Seller, and Seller, in the case of an assignment by Cott or
any Buyer, which consent will not be unreasonably withheld or delayed; provided,
however, that the events described in (i)-(iv) below shall be deemed to be a
permitted assignment and shall not require consent: (i) a change in control in
or a merger by (either as the surviving or non-surviving entity) or sale of all
or substantially all of the assets of either Cott or Seller, (ii) either Seller,
on the one hand, and Cott and the Buyers, on the other hand, may assign all of
its rights hereunder to an institutional lender (meaning a commercial bank,
insurance company, reputable commercial lender, investment bank or a trustee for
holders of debt securities) in connection with a financing from such
institutional lender without the prior written consent of the other, (iii)
Seller may assign all of its rights and obligations hereunder to the purchaser
of all or substantially all of the assets of the RC Domestic Business without
the prior written consent of Cott, so long as in connection with any such
assignment, Seller complies with the requirements of Section 11.4, any such
buyer agrees to be bound by the applicable provisions set forth in Section 11.4
and Seller remains jointly and severally liable for its obligations under
Article VIII hereof and (iv) Cott and the applicable Buyer may assign all of its
rights and obligations hereunder to the extent that they relate solely to the RC
International Assets to the purchaser of all or substantially all of the assets
of the RC International Business without the prior written consent of Seller so
long as in connection with any such assignment, Cott complies with the
requirements of Section 11.4, any such buyer agrees to be bound by the
applicable provisions set forth in Section 11.4 and Cott remains jointly and
severally liable for its obligations under Article VIII hereof.
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12.9 SUCCESSORS AND ASSIGNS. This Agreement and the provisions thereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12.10 GOVERNING LAW. The parties hereto have agreed that the validity,
construction, operation and effect of any and all of the terms and provisions of
this Agreement shall be determined and enforced in accordance with the
substantive laws of the State of New York without giving effect to principles of
conflicts of law thereunder.
12.11 COUNTERPARTS. This Agreement may be executed in any number of
duplicate counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
12.12 CONSENT TO JURISDICTION. Each party hereto hereby irrevocably and
unconditionally (i) submits, for itself and its property, to the exclusive
jurisdiction of any Federal Court sitting in New York County of the State of New
York in any suit, action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement of any judgment rendered in any such
suit, action or proceeding, (ii) waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding in
any such court, including any claim that any such suit, action or proceeding has
been brought in an inconvenient forum and (iii) waives all rights to a trial by
jury in any such suit, action or proceeding. Any and all service of process and
any other notice and any such action or proceeding shall be effective against
any party if given personally or by registered or certified mail, return receipt
requested, or by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such party as provided herein. Nothing herein contained shall
be deemed to affect the right of any party to serve process in any manner
permitted by law.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties have duly signed this Agreement as of the
date first written above.
ROYAL CROWN COMPANY, INC.
/s/ Xxxx X. Xxxxx
By:_________________________________
Name:
Title: V.P.
COTT CORPORATION
/s/ Xxxx Xxxxxxxx
By:_________________________________
Name: X. Xxxxxxxx
Title: SVP, Legal Counsel & Secty
BCB USA CORP.
/s/ Xxxx Xxxxxxxx
By:_________________________________
Name: X. Xxxxxxxx
Title: SVP & Secretary
