EXHIBIT 10.11
DEED OF VARIATION - SHARE SALE AGREEMENT
relating to shares in HJF Acquisition Corporation
The J.M. Smucker Company (VENDOR)
SPC Ardmona Limited (PURCHASER)
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.
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DEED OF VARIATION - SHARE SALE AGREEMENT
DETAILS 3
AGREED TERMS 4
1. DEFINITIONS AND INTERPRETATION 4
1.1 Definitions 4
1.2 Interpretation 4
1.3 Headings 4
2. VARIATIONS TO THE AGREEMENT 4
2.1 Variations to clause 1.1 4
2.2 Variations to clause 7.6 5
2.3 Variations to clause 7.7 7
2.4 Insertion of new clause 10.11 8
2.5 Insertion of Warranty 8.13 of Schedule 5 8
2.6 Confirmation 8
3. MISCELLANEOUS 8
3.1 Alterations 8
3.2 Assignment 9
3.3 Costs 9
3.4 Counterparts 9
3.5 Governing law and jurisdiction 9
SIGNING PAGE 10
DETAILS
DATE JUNE 2004
PARTIES
Name The J.M. Smucker Company (a corporation incorporated in
the State of Ohio, United States of America)
Short form name VENDOR
Notice details Strawberry Lane, Orville, OH 44667-0280, United States
of America
Facsimile: + 1 330 684 3026
Attention: General Counsel
Name SPC Ardmona Limited
ABN 68 059 317 618
Short form name PURCHASER
Notice details 19-25 Camberwell Road, Hawthorn East, Victoria,
Australia, 3123
Facsimile: + 61 03 5822 2121
Attention: Managing Director and Company Secretary
BACKGROUND
A The parties entered into a share sale agreement on 12 May 2004 under which
the Vendor has agreed to sell, and the Purchaser has agreed to purchase,
the Shares (AGREEMENT).
B The parties acknowledge that Completion is scheduled to take place on 16
June 2004.
C The parties also acknowledge that the Purchaser will not have had the
opportunity to properly review the Completion Accounts and the Adjustment
Amount in accordance with clause 7.6 of the Agreement prior to Completion.
D The parties have agreed to amend the Agreement to preserve the Purchaser's
rights to dispute the Completion Accounts and/or the Adjustment Amount
post Completion, on the terms of this deed.
AGREED TERMS
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this deed, a term defined in the Agreement and not otherwise defined in
this deed has the same meaning in this deed.
1.2 INTERPRETATION
In this deed, unless the contrary intention appears:
(a) the singular includes the plural and vice versa;
(b) words importing natural persons includes bodies corporate and vice
versa;
(c) reference to clauses and schedules are references to clauses and
schedules of this deed;
(d) a reference to time is to Victoria, Australia time;
(e) a reference to any document or agreement (including this deed)
includes that document or agreement as amended, novated,
supplemented or replaced;
(f) a reference to a party to this deed or any other document or
agreement includes that party's successors or permitted assigns;
(g) a rule of construction does not apply to the disadvantage of a party
because the party was responsible for the preparation of this
agreement or any part of it; and
(h) if a day on or by which an obligation must be performed or an event
must occur is not a Business Day, the obligation must be performed
or the event must occur on or by the next Business Day.
1.3 HEADINGS
In this deed, headings are for convenience only and do not affect
interpretation.
2. VARIATIONS TO THE AGREEMENT
2.1 VARIATIONS TO CLAUSE 1.1
(a) The parties agree to delete the definition of "Completion Date" and
replace it with the following definition:
"COMPLETION DATE means 16 June 2004."
(b) The parties agree that the following new definitions are to be
inserted in clause 1.1 of the Agreement:
"ESCROW ACCOUNT" means the bank account to be established under
clause 4.6(b).
"ESCROW AGENT" means Baker & McKenzie Solicitors of Level 39, 525
Collins Street, Melbourne, Victoria 3000, Australia.
"ESCROW AMOUNT" means the total amount of $200,000, comprising:
(i) the Labelling Escrow Amount; and
(ii) the Transfer Pricing Escrow Amount.
"ESCROW BALANCE" means the balance of the Escrow Account, including
all interest (payable under clause 4.6(g)), after deducting any bank
charges and Taxes payable on the operation of the Escrow Account.
"ESCROW LETTER" means a letter from the Vendor to the Purchaser and
the Escrow Agent regarding the appointment of the Escrow Agent, as
agreed between the parties prior to Completion.
"INDEPENDENT EXPERT" means:
(a) for all disputes other than disputes relating to the Labelling
Issue, the Independent Accountant; and
(b) in the case of a dispute relating to the Labelling Issue, the
Queens Counsel.
"LABELLING ESCROW AMOUNT" means the amount of $150,000.
"LABELLING ISSUE" means the issue relating to origin labelling of
products under the Food Standards and the Trade Practices Act (and
related State and Territory Fair Trading Acts), other than issues
arising from undertakings given by the Purchaser to ACCC.
"QUEENS COUNSEL" means the Queens Counsel appointed in accordance
with clause 7.7(d).
"TRANSFER PRICING ISSUE" means the issue relating to the treatment
of transfer pricing in the Completion Accounts for the supply of the
Transition Products.
"TRANSFER PRICING ESCROW AMOUNT" means the amount of $50,000."
2.2 VARIATIONS TO CLAUSE 4.2
The parties agree that clause 4.2 of the Agreement is deleted and replaced
with the following clause:
"On the Completion Date the Purchaser must pay:
(a) the Escrow Amount to the Escrow Agent; and
(b) the Purchase Price less the Escrow Amount to the Vendor."
2.3 INSERTION OF NEW CLAUSE 4.6
The parties agree that a new clause 4.6 is to be inserted in the Agreement
as follows:
"4.6 ESCROW AMOUNT
(a) On Completion, the Vendor and the Purchaser must sign and deliver
the Escrow Letter to the Escrow Agent.
(b) The parties must direct the Escrow Agent to invest the Escrow Amount
in an interest bearing account with a reputable financial
institution on 24 hour call in the joint names of the Vendor and the
Purchaser, with the Escrow Agent named as the sole signatory to the
Escrow Account.
(c) Payment may only be made out of the Escrow Account:
(i) to the Vendor as required under clauses 4.6(d) and/or (e); or
(ii) to the Vendor or the Purchaser:
(A) upon receipt by the Escrow Agent of a written direction
as to quantum and recipient(s) of the relevant payment
or payments to be made by the Escrow Agent (including
for the purpose of distributing any funds remaining in
the
Escrow Account after the provisions of this clause 4.6
have been exhausted) signed by both of the parties; or
(B) as determined by the Independent Expert under clause 7.7
in respect of the quantum (including interest) and
recipient(s) of the relevant payment or payments
(including for the purpose of distributing any funds
remaining in the Escrow Account after the provisions of
this clause 4.6 have been exhausted).
(d) Subject to clauses 4.6(c)(ii) and 4.6(e), the parties must direct
the Escrow Agent to pay the Escrow Balance to the Vendor from the
Escrow Account within 2 Business Days of the earlier of:
(i) if the Purchaser does not raise the Labelling Issue or the
Transfer Pricing Issue (as the case may be) as a dispute as
provided in clause 7.7, the Final Objection Date;
(ii) if the Purchaser gives the Vendor a Dispute Notice under
clause 7.7(a) on the basis of the Labelling Issue and/or the
Transfer Pricing Issue (as the case may be) and the parties
resolve the matter in dispute within 10 Business Days, the
date on which the dispute is resolved; and
(iii) if the dispute relating to the Labelling Issue and/or the
Transfer Pricing Issue (as the case may be) is submitted for
determination to the Independent Expert(s), the date on which
the relevant Independent Expert issues its determination.
(e) If at any of the respective dates described in clause 4.6(d), one or
the other of the Labelling Issue or the Transfer Pricing Issue
remains outstanding, then:
(i) the amount that the parties must direct the Escrow Agent to
pay under that clause will be the Escrow Balance less the
Labelling Escrow Amount (if the Labelling Issue remains
outstanding) or the Transfer Pricing Amount (if the Transfer
Pricing Issue remains outstanding) (the remaining amount in
the Escrow Account being the Shortfall Amount); and
(ii) subject to clause 4.6(c)(ii), the parties must direct the
Escrow Agent to pay the Shortfall Amount (plus all interest
payable under clause 4.6(g), less any bank charges and Taxes)
to the Vendor from the Escrow Account within 2 Business Days
of the earlier of the respective dates described in clause
4.6(d).
(f) Each party agrees to direct the Escrow Agent in writing so as to
give full effect to this agreement (including clause 4.6(g)).
Neither the Vendor nor the Purchaser will instruct the Escrow Agent
to deal with the Escrow Balance, the Escrow Amount, the Labelling
Escrow Amount or the Transfer Pricing Escrow Amount other than in
accordance with the provisions of this clause 4.6.
(g) The parties agree that interest on any part of the Escrow Amount is
to be paid as follows:
(i) any interest accruing during the period up to and including
the Final Objection Date is to be paid to the Purchaser;
(ii) any interest accruing from the Final Objection Date up to the
end of the 10 Business Days following the provision of the
Dispute Notice under clause 7.7(b) is to be shared equally by
the parties if the dispute is resolved within that period; and
(iii) if the dispute is not resolved within the period referred to
in clause 4.6(g), any interest accruing from the Final
Objection Date until determination by the Independent Expert
under clause 7.7(g) is to be paid in accordance with the
Independent Expert's determination."
2.4 VARIATION TO CLAUSE 6.3(a)
The parties to agree to amend clause 6.3(a) of the Agreement by deleting
the reference to "amount under clause 4.1" and replacing it with "amounts
under clause 4.2".
2.5 VARIATIONS TO CLAUSE 7.6
The parties agree to delete the first sentence of clause 7.6 of the
Agreement and replace it with the following clause:
"The Purchaser has the period of 14 days after the Completion Date to
dispute the Completion Accounts (including the Purchaser pursuing a
dispute in relation to the Labelling Issue and/or the Transfer Pricing
Issue) and the Adjustment Amount (the last date of that period, FINAL
OBJECTION DATE), after which the Completion Accounts and the Adjustment
Amount will be final and binding on the parties if the Purchaser does not
dispute the Completion Accounts or the Adjustment Amount as provided in
clause 7.3. If the Purchaser disputes the Completion Accounts or the
Adjustment Amount on or before the Final Objection Date, the dispute will
be determined in accordance with clause 7.7."
2.6 VARIATIONS TO CLAUSE 7.7
(a) The parties agree that clause 7.7(a) of the Agreement is amended so
that:
(i) only the Purchaser is defined as the "Disputing Party"; and
(ii) the words "(including the Purchaser pursuing a dispute in
relation to the Labelling Issue and/or the Transfer Pricing
Issue)" are added after the words "Completion Accounts".
(b) The parties agree that clauses 7.7(c), 7.7(e), 7.7(f) and 7.7(g) of
the Agreement are amended so that the words "Independent Accountant"
are replaced with "Independent Expert" wherever those words appear
in those clauses.
(c) The parties agree that clause 7.7(d) of the Agreement is deleted and
replaced with the following clause:
"The Queens Counsel (in the case of a dispute relating to the
Labelling Issue) and/or the Independent Accountant (in the case of
all other disputes) must be agreed by the Vendor and the Purchaser.
If the Vendor and the Purchaser cannot agree within 5 Business Days
of the other party giving the Response to the Disputing Party, then
the relevant Independent Expert will be nominated:
(i) in the case of a dispute relating to the Labelling Issue, at
the request of either the Vendor or the Purchaser, by the
President of the Victorian Bar Association; and
(ii) in the case of all other disputes, at the request of either
the Vendor or the Purchaser, by the President of the Institute
of Chartered Accountants (Victorian Branch)."
(d) The parties agree that clause 7.7(h) of the Agreement is deleted and
replaced with the following clause:
"If the final Adjustment Amount determined in accordance with clause
7.7(g) is:
(i) more than the Adjustment Account included in the Purchase
Price, then within 5 Business Days the Purchaser must pay an
amount equal to the excess to the Vendor in accordance with
clause 4.3; and
(ii) less than the Adjustment Amount included in the Purchase
Price, then within 5 Business Days the Vendor must pay an
amount equal to the shortfall to the Purchaser in accordance
with clause 4.3."
2.7 VARIATION TO CLAUSE 7.8
The parties agree that clause 7.8(b) of the Agreement is amended so that
the words "Independent Accountant" are replaced with "Independent Expert".
2.8 INSERTION OF NEW CLAUSE 10.11
The parties agree that a new clause 10.11 is to be inserted in the
Agreement as follows:
"From the Completion Date until the last Category A Member or Category B
Member's benefits have been paid out of the HJF Fund:
(a) one nominee of the Vendor, as notified in writing to the Purchaser
from time to time, will be permitted to attend as an observer at
meetings of the Board of directors of HJF Superannuation Nominees;
(b) the observer nominated under clause 10.11(a) will be provided notice
of any directors' meeting by the Purchaser promptly after the
Purchaser's nominees on the Board of HJF Superannuation Nominees
receive that notice;
(c) the observer nominated under clause 10.11(a) will be permitted to
speak at such directors' meetings subject to the constitution of HJF
Superannuation Nominees and directions of the Chairman of the
meeting and the trust deed of the HJF Fund; and
(d) any matters debated, discussed or decided by the Board of directors
of HJF Superannuation Nominees shall be kept confidential by the
observer until the directors otherwise determine, provided always
that the observer may inform the Vendor and its advisers of, or
provide any copies to the Vendor of, any resolution made by the
Board which would increase any unfunded liability of the HJF Fund
for the purposes of clause 10.7 or expose the Vendor to provide
indemnification under clause 12.4."
2.9 VARIATION TO WARRANTY 8.5 OF SCHEDULE 5
The parties agree that warranty 8.5 in Schedule 5 of the Agreement is
amended so that the words "To the Vendor's knowledge, the" are replaced
with "The".
2.10 INSERTION OF WARRANTY 8.13 OF SCHEDULE 5
The parties agree that a new warranty 8.13 is to be inserted in Schedule 5
of the Agreement as follows:
"Prior to and as at Completion there has been no breach of the governing
rules of the HJF Fund, any award, industrial agreement, employment
contract or applicable law, in respect of Henry Jones Food's obligation to
make superannuation contributions in respect of a Completion Employee who
is a Category A Member or Category B Member in the HJF Fund."
2.11 CONFIRMATION
The parties confirm that, other than the variations in this deed, the
provisions of the Agreement remain in full force and effect in accordance
with their terms and continue to bind the parties.
3. MISCELLANEOUS
3.1 ALTERATIONS
This deed may be altered only in writing signed by each party.
3.2 ASSIGNMENT
A party may only assign this deed or a right under this deed with the
prior written consent of the other party.
3.3 COSTS
Each party must pay its own costs of negotiating, preparing and executing
this deed.
3.4 COUNTERPARTS
(a) This deed may be executed in counterparts. All executed counterparts
constitute one document.
(b) This deed is binding on the parties on exchange of duly executed
counterparts.
3.5 GOVERNING LAW AND JURISDICTION
This deed is governed by the law of Victoria and each party irrevocably
and unconditionally submits to the non-exclusive jurisdiction of the
courts of Victoria.
SIGNING PAGE
EXECUTED as a deed.
EXECUTED by SPC ARDMONA LIMITED
/s/ Nigel Garrard /s/ Monika Maedler
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Signature of director Signature of director/company secretary
(Please delete as applicable)
Monika Maedler
Nigel Garrard
- --------------------------- -------------------------------------------
Name of director (print) Name of director/company secretary (print)
The J. M. Smucker Company
/s/ Richard K. Smucker
- -------------------------------------------
Richard K. Smucker, President, Co-Chief Executive Officer, and
Chief Financial Officer
/s/ Barry C. Dunaway
- -------------------------------------------
Barry C. Dunaway, Vice President - Corporate Development
State of Ohio )
) SS:
County of Wayne )
On this 16th day of June, 2004, personally appeared before me, Richard K.
Smucker, the President, Co-Chief Executive Officer, and Chief Financial Officer
of The J. M. Smucker Company and Barry C. Dunaway, Vice President - Corporate
Development of The J. M. Smucker Company, each to me known to be the person
named in and who executed the above instrument, and acknowledged to me that each
executed the same for the uses and the purposes therein mentioned.
Date: 6-16-04 /s/ Jeannette Knudsen
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Notary Public
Notary Seal Jeannette L. Knudsen, Attorney-At-Law
State of Ohio Notary Public - Sate of Ohio
My Commission has no expiration date
Sec. 147.03 R.C.