Exhibit 10.9
END PRODUCT PURCHASE AGREEMENT
THIS AGREEMENT is dated as at the 2 day of October, 2000.
BETWEEN:
PLANET EARTH OPERATING SERVICES INC., a Canada Business
Corporations Act corporation, have a place of business located at
00 Xxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx, X0X 0X0
(hereinafter referred to as the "Buyer")
OF THE FIRST PART
AND:
HAMILTON BIO CONVERSION INC. a corporation duly incorporated
pursuant to the laws of the Province of Ontario and having its
principal place of business located at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx X0X 0X0
(hereinafter referred to as the "Seller")
OF THE SECOND PART
WHEREAS:
A. The Seller will operate a waste processing facility on or about 0000
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the "Plant") utilizing patented thermophilic
digestion technology (the "Process") under license to the Seller;
B. The Seller wishes to sell and the Buyer wishes to purchase all end
products produced by the Plant on the terms and conditions as set out herein.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutual
promises as set out below the parties hereto agree as follows:
ARTICLE 1
TERM
1.1 The initial term (the "Initial Term") of this Agreement will commence on
the date on which the Plant is operational (the "In-service Date") and will
continue for twelve years unless terminated earlier in accordance with the
terms of this Agreement.
1.2 The term of this Agreement will automatically renew for further one-year
periods unless notice is given by either party not less than six (6) months
prior to the expiration of the Initial Term of any such additional term or
terms.
1.3 Either party may terminate this Agreement at the end of the third, sixth or
ninth year of the Initial Term upon ninety (90) days written notice to the
other party.
ARTICLE 2
PURCHASE
2.1 Subject to the terms of this Agreement, the Buyer will purchase and the
Seller will sell all end products produced by the Plant which conform to
the specifications set out in Appendix A to this Agreement (the
"Products").
2.2 The Seller will provide the Buyer, on each Friday during the term of this
Agreement, an estimate of its production expectations for the next seven
(7) days. This Production estimate will contain as much detail as to the
expected type and volume of Products to be purchased as is practical in the
circumstances.
2.3 The Buyer will pay the Seller one hundred and forty dollars ($140) per
tonne of Product (the "Price") or as the parties may otherwise agree. The
parties agree that the Price may be adjusted every third anniversary date
of this Agreement during the Initial Term and on each anniversary date
thereafter.
2.4 Beginning on the second month of the Initial Term the Buyer will provide to
the Seller no later than fifteen (15) days after the end of each calendar
month during the term of this Agreement, a statement (the "Statement")
showing the previous month's total tonnage of Products received and re-sold
by the Buyer.
2.5 At the same time that the Statement is provided by the Buyer the Buyer will
pay the Seller an amount equal to the Price multiplied by the number of
tons of product re-sold by the Buyer for which the Buyer has been paid
during the period covered by that Statement and not the volume of Products
delivered to the Buyer. Payment shall be made by way of cheque delivered by
the Buyer to the Seller unless otherwise agreed to by the parties.
2.6 Any late payments shall bear interest at the rate of 1.5% per month.
ARTICLE 3
QUALITY OF PRODUCT
3.1 The Seller warrants and represents to the Buyer as follows:
(a) The Products delivered to the Buyer will contain only quality
ingredients and shall be in accordance with the specifications set out
in Appendix A;
(b) The Products delivered to the Buyer as animal feed (the "Animal Feed
Products") will conform with the requirements for such Products as set
out by the Association of American Feed Control Officials Incorporated
and as set out in the Canadian Feed Act and Regulations, as published
and amended from time to time;
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(c) Animal Feed Products will not contain any material or contaminants
which would make the Animal Feed Products harmful as animal feed;
(d) The Products will have a maximum twelve (12%) percent moisture
content.
3.2 The Seller will maintain current and accurate logs of the raw materials
being utilized by the Plant.
3.3 Upon reasonable notice the Seller will provide the Buyer with access to the
Plant to inspect any and all raw materials or Products.
3.4 The Buyer will assist the Seller in creating Product specifications and
formulations to ensure Product is marketable within the applicable
district. Furthermore, upon reasonable notice, the Seller agrees to permit
the Buyer to enter the Plant during normal business hours for the purpose
of Product testing.
3.5 If additional ingredients are required by the Buyer for Product blending
purposes, the Seller will purchase such ingredients from an authorized
agent of the Buyer provided that such ingredients are competitively priced
and the resulting end product is economically viable to the parties.
3.6 If the Seller intends to introduce any non waste food products into its
processing, it will promptly notify Buyer prior to doing so.
ARTICLE 4
PACKAGING
4.1 The Seller will ensure that the Products are blended and packaged in the
manner specified from time to time by the Buyer acting reasonably.
ARTICLE 5
DELIVERY
5.1 The Seller covenants and agrees with the Buyer with respect to delivery of
the Product that the Seller will:
(a) at its sole risk and expense deliver the Products FOB at the Plant, in
accordance with the delivery and packaging instructions of the Buyer;
(b) notify the Buyer without delay when the Products are ready for
pick-up;
(c) maintain at its own cost adequate storage to facilitate delivery of
the Products;
(d) provide an maintain at its own cost suitable load-out facilities for
the Products at the Plant;
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(e) bear all costs and risks associated with the Products until such time
as the Products are delivered to the Buyer or the Buyer's
representative in accordance with section 5.1(a) herein;
(f) provide and maintain at its own cost all equipment necessary to load
the Products in the Buyer's or the Buyer's representative truck at the
Plant; and
(g) collect and provide to the Buyer or its representative, samples from
each shipment of Product delivered.
5.2 The Seller will provide the Buyer and the Buyer's authorized employees,
agents and contractors with free and reasonably unrestricted and undelayed
access to the loading area at the Plant in order to allow the Buyer to meet
its Product's removal obligations in an efficient and expeditious manner.
5.3 The Seller will be responsible for truck demurrage time in excess of one
(1) hour and will reimburse the Buyer for such truck demurrage at the rate
such cost is incurred, plus ten (10%) percent administrative penalty. Such
truck demurrage time shall not exceed three (3) hours per incident unless
greed to in advance by the Seller.
5.4 The Buyer will advise the Seller when the Buyer has encountered any
material non-performance of any obligation of the Seller pursuant to this
Article 5 and the Seller will have a reasonable time to cure any such
non-performance. The Seller will notify the Buyer within twenty-four (24)
hours of receiving such notice from the Buyer of the Seller's remedy for
the non-performance indicated by the Buyer.
5.5 The Buyer covenants and agrees with the Seller with respect to the delivery
of Products that the Buyer will:
(a) promptly remove Products from the Plant so as to avoid any
interruption in the operator's regular plant operations; and
(b) pick-up at regular intervals the samples of the Products collected by
the Seller pursuant to Section 5.1(g) herein.
5.6 Should the Buyer fail for any reason to promptly take delivery of and
remove the Products from the Plant, the Seller may send written notice to
the Buyer by personal delivery or facsimile to the Buyer's office of the
Buyer's failure to do so. If the Buyer fails to take delivery within
twenty-four (24) hours of receipt of such notice, then the Seller will be
free to remove and sell such Products to other buyers at its discretion.
5.7 If Product does not meet the standards as set out in Schedule A, the Seller
may request the Buyer's assistance in disposing of such Product. If Buyer
agrees to dispose of such Product in advance or if subsequent to acceptance
of Product by the Buyer the Product is found not to meet the required
standard, the Buyer will use its reasonable efforts to dispose of such
Product in a cost efficient way at the best available market price. If
Buyer is able to sell such Product, it will evenly divide the net proceeds
with the Seller (after accounting for its costs). If the Buyer is not able
to sell such Product, the Seller will re-take the Product at its expense,
and in any event Buyer will be entitled to setoff its reasonable costs with
notice to Seller against any other sums owed to Seller.
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ARTICLE 6
TRANSFER OF TITLE AND RISK
6.1 The Seller and the Buyer agree that the title to the Products and all risks
will transfer from the Seller to the Buyer when the Seller has delivered
the Products to the Buyer accordance with Section 5.1(a) herein.
ARTICLE 7
WEIGHT
7.1 All Products will be weighed over the Seller's full deck truck scales. Such
scales will be inspected at regular intervals, have the appropriate seal
affixed by the appropriate government regulatory agency and shall be legal
for trade. Scale weights shall be accompanied by a printed scale ticket.
The Seller agrees to permit the Buyer to re-sell Products using scales
other than the Seller's, provided that such scales conform to the
applicable regulatory requirements. The Buyer agrees that use of alternate
scales will only occur on an exception basis to facilitate a sale and only
when to the benefit of both parties.
ARTICLE 8
MUTUAL INDEMNITY
8.1 Each of the parties hereto will indemnify and hold harmless the other party
from and against any all liability, damages, losses and costs (including
legal fees on a solicitor and his own client basis) suffered or incurred by
such party as a result of any breach of this Agreement by the other party
or as a result of any negligent act or neglect of the other party, its
servants, employees, agents, invitees, or licensees, including liability
for injury or damage to any person or property.
ARTICLE 9
INSURANCE
9.1 The Buyer and the Seller shall each provide and keep in force for the
other, comprehensive general liability insurance in respect of personal
injury, death or property damage with generally accepted insurance carriers
as are customary for risks of this nature and for a minimum of $5,000,000
per occurrence and each party will provide to the other, proof of such
insurance renewal thereof, upon request. The Buyer shall be named as an
insured third party on the Seller's insurance.
ARTICLE 10
NON-WAIVER
10.1 Any waiver or condoning by one party of any breach of this Agreement by the
other party shall not operate as a waiver or condoning of any subsequent
breach of this agreement by the other party.
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ARTICLE 11
EXCLUSIVITY
11.1 During the term of this Agreement, subject to Section 5.6, the Buyer will
be the exclusive agent for purposes of marketing, distributing and sale of
the Products. The Seller will not sell, deliver or otherwise dispose of any
of the Products to any person, firm, partnership, syndicate, corporation,
or other entity other than the Buyer or parties authorized in writing in
advance by the Buyer. The Seller will refer all potential Product purchases
to the Buyer and the Buyer will ensure that it deals with all such
referrals on a prompt and courteous basis.
11.2 The Seller may retain minor portions of the Product for internal testing or
other such uses by itself or other affiliated corporations.
ARTICLE 12
CONFIDENTIALITY
12.1 The Seller acknowledges that, by reason of the Agreement, it will become
privy to confidential information belonging to the Buyer, including the
identity of the Buyer's and Buyer's agent's customers and pricing
information. The Seller will not, without the prior written consent of the
Buyer, disclose to any third party or use for its own benefit, any such
confidential information either during the term of the Agreement or
thereafter.
12.2 The Buyer acknowledges and agrees with the Seller that all information
connected with the Plant, the Process or the Products is confidential, and
the Buyer will use its best efforts to protect the confidentiality of such
information and will not disclose such information or any part thereof to
any other person except to its consultants, subcontractors and employees as
may be necessary to carry out its rights and obligations under this
Agreement, and except as may be required for the Buyer's financial
reporting, income tax or regulatory purposes. The Buyer will require each
and every one of its employees, consultants, or sub-contractors who are
provided with any information in respect of the Products or related
knowledge to sign confidentiality agreements with the Buyer and the Seller,
such agreements to be in a form acceptable to the Seller.
ARTICLE 13
TERMINATION
13.1 Notwithstanding anything herein contained, either party may terminate this
Agreement upon written notice to the other party in the event that:
(a) such other party commits a material breach of any provision of this
Agreement and fails to cure that breach within fifteen (15) days
following receipt of a notice of such breach by the other party (which
notice must specify in reasonable detail the breach or breaches
complained of);
(b) the Seller decide to close the Plant;
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(c) either party becomes the subject of any bankruptcy, insolvency or
similar proceedings; or
(d) any legislation, regulations, policy ruling or decision of a Federal,
Provincial State or Municipal government or of any agency thereof is
implemented, repealed or altered in such a way as to significantly
prevent either party from lawfully exercising its rights or performing
its obligations hereunder.
ARTICLE 14
GENERAL
14.1 If any term, covenant or condition of this Agreement or the application
thereof to any party or circumstance shall be invalid or unenforceable to
any extent, the remainder of this agreement or application of such term,
covenant or condition to a party of circumstances other than those to which
it is held invalid or unenforceable shall not be affected thereby and each
remaining term, covenant or condition of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law.
14.2 This Agreement constitutes the entire agreement between the parties hereto
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussion,
whether oral or written, of the parties and there are not general or
specific warranties, representations or other agreements by or among the
parties in connection with the entering into of this Agreement or the
subject matter hereof except as specifically set forth herein.
14.3 The parties hereto and each of them do hereby covenant and agree to do such
things and execute such further documents, agreements and assurances as may
be necessary or advisable from time to time in order to carry out the true
intent and purposes of this Agreement fully and effectively.
14.4 This Agreement may be altered or amended in any of its provisions when any
such changes are reduced to writing and signed by the parties hereto but
not otherwise.
14.5 Unless otherwise indicated any notice required to be given under this
Agreement shall be in writing and addressed to the parties as hereinbefore
set out and may be delivered or telecopied. Any notice given as aforesaid
shall be deemed to have been received, if delivered, when delivered or, if
telecopied on the business day after the date of telecopying.
14.6 Wherever the singular, plural, masculine, feminine or neuter is used
throughout this Agreement, the same shall be construed as meaning the
singular, plural, masculine, feminine, neuter, body politic or body
corporate where the fact or context so requires and the provisions hereof.
14.7 This Agreement shall be governed by and construed in accordance with the
laws of Ontario and the parties hereto submit to the jurisdiction of the
Courts in Ontario. The parties agree that any litigation between the
parties which arises pursuant to or in connection with the Agreement, or
any of its provisions, shall be referred to the Courts in Ontario and shall
not be referred to the Courts of any other jurisdiction.
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14.8 Time shall be of the essence of this Agreement and of every part hereof.
14.9 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
14.10If either party fails to meet its obligation hereunder within the time
prescribed and such failure is caused or materially contributed to by force
majeure (and for the purposes of this Agreement, force majeure shall mean
any act of God, strike, lockout, or other industrial disturbances,
sabotage, war, blockages, insurrections, riots, epidemics, lightning,
earthquakes, floods, storms, fires, washouts, nuclear and radiation
activity or fallout, arrests and distraints of rules and people, civil
disturbances, explosion, breakage or accident to machinery or stoppage
thereof for necessary maintenance or repairs, inability to obtain labor,
materials or equipment, any legislative, administrative or judicial action
which has been resisted in good faith by all reasonable means, any act,
omission, or event whether of the kind herein enumerated or otherwise not
within the control of such party, and which by the exercise of due
diligence such party could not have prevented, but lack of funds on the
part of such party or parties shall be deemed not to be a force majeure)
such failure shall be deemed not to be a breach of the obligations of that
party if the respective party uses its best efforts to put itself in a
position to carry out its obligations hereunder.
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14.11This Agreement is assignable or may be sublet or contracted by the Buyer,
in whole or part, from time to time, as of right, upon reasonable written
notice thereof to the Seller and by such assignment, subletting or
subcontract the Agreement shall be deemed remade as a novation as between
the Seller and each such assignee or subcontractor, respectively, as the
case may be and for the remaining term of the Agreement during the
operation of such assignment, subletting or subcontracting, the Seller
shall be freed and relieved of all obligation hereunder and such
obligations shall be borne solely by the assignee or subcontractor. This
Agreement is not assignable by the Seller, nor capable of being
subcontracted or otherwise delegated in any manner by the Seller.
WITNESS WHEREOF the parties hereto have hereunto executed this Agreement as of
the day and year first above written.
PLANET EARTH OPERATING SERVICES INC.
By: /S/ Xxxxx Xxxxx
-----------------------------
HAMILTON BIO CONVERSION INC.
By: /S/ Xxxxx Xxxxxxx
-------------------------
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APPENDIX "A"
PRODUCT SPECIFICATIONS
Animal Feed
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The Product, Thermophilic Dehydrated Food Waste, shall consist of a mixture of
food waste products that have been separated from non-edible packaging material,
and is further processed by heat treatment and dehydration. The material may be
obtained from food processing and food servicing establishments other than those
at international ports of entry. It may contain grains, millfeed or oilseed
meal as a carrier. The waste product shall be picked up daily or sufficiently
often that no decomposition is evident. If an antioxidant(s) is used, the
common name or names shall be indicated on the label. It shall be labelled for
guarantees for minimum crude protein, minimum crude fat, minimum and maximum
calcium and minimum and maximum phosphorus, maximum salt, maximum crude fibre
and maximum moisture and minimum antioxidant, if added.
In addition to meeting the above definition, registration entails that the
following conditions are met:
1. The following lists of ingredients only are approved within the above
definition. Any additions to this list must be approved by the office of
Food Inspection Directorate, Plant Products Division prior to their
addition into the Product, Thermophilic Dehydrated Food Waste.
Restaurant and Kitchen By-Products
- Pre-Consumer
- Post-Consumer
Processed Food and Beverage Products
- To include bakery wastes and manufactured goods
- Outdated products
- Off-spec products
- Improperly packaged products
- Unused portions
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Edible Grains, Legumes, Pulses
- Flours from these sources
- Hulls and fines
- Dough
- Pasta products fresh and dry
- Distillers and brewers grain fermentation by-products
- Cereal by-products
- Edible vegetable oils and fats
Fruit and Vegetable Material
- To include juices and pomace
- Outdated retail or wholesale stocks
Mean and Meat Products*
- To include meat trim, meat processing wastes, poultry
by-products, sausages and other processed meats
*Meat processing products may not include the product obtained by the
flocculation of the processing waste and water stream.
Dairy Products
- Outdated ice cream
- Outdated cheese products
- outdated milk, cream and yogurt
- Cheese whey
- Improperly packaged products
Pet Food
- Outdated or off-spec
2. Antioxidants such as ethoxyquin may be added in an amount not to exceed
0.015% of the total diet of the animal. This can be calculated based on the
inclusion rate of your product. A label statement must indicate if an
antioxidant is added in the future.
3. If modifications to the described process are made, the Buyer and the Food
Inspection Directorate, Plant Products Division shall be notified
immediately.
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4. If changes to the reported quality control procedures used to assure
uniformity of the mix and the lack of contamination of subsequent lots of
feed are made, the Buyer and the Food Inspection Directorate, Plant Product
Division shall be notified immediately.
5. The feed is approved only for use in swine and broiler rations at a rate of
up to ten (10%) percent of the ration. (This feed is not approved for use
in ruminant rations in Canada.)
Specific Product specifications for Thermophilic Dehydrated Food Waste shall be
as follows:
Moisture, maximum 12.0%
Crude Protein, minimum 18.0%
Crude Fiber, maximum 30.0%
Fat, minimum 12.0%
Calcium, minimum 1.0%
Calcium, maximum 1.5%
Phosphorous, minimum 0.2%
Phosphorous, maximum 0.6%
Salt, maximum 0.6%
Expiry Date 60 days from manufacture date
The parties hereby agree to the foregoing appendix.
PLANET EARTH OPERATING SERVICES INC.
By: /S/ Xxxxx Xxxxx
HAMILTON BIO CONVERSION INC.
By: /S/ Xxxxx Xxxxxxx
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