THIS AGREEMENT made as of the 11th day of November, 1997.
BETWEEN:
ADM AGRI-INDUSTRIES, LTD., a corporation incorporated under the
laws of
Ontario (herein called the "Vendor")
OF THE FIRST PART
AND
RIVERSIDE GRAIN PRODUCTS INC. a corporation incorporated under
the laws of
Ontario (herein called the "Purchaser")
OF THE SECOND PART
AND
SOUTHERN VENTURES, INC.a corporation incorporated
under the laws of Alberta (herein called "SVI")
OF THE THIRD PART
WHEREAS the Vendor has agreed to sell to the Purchaser and the
Purchaser has
agreed to purchase from the Vendor all of the right, title and
interest in and
to all of the tangible assets which make up the Vendor's starch
and gluten
manufacturing facility and adjacent Saskatchewan Wheat Pool #8
facility in
Thunder Bay, Ontario on and subject to the terms and conditions
herein
contained;
NOW THEREFORE THIS AGREEMENT WITNESSETH, in consideration of the
covenants,
agreements, representations, warranties and payments herein
provided for and
other good and valuable consideration (the receipt and
sufficiency of which is
hereby acknowledged by each of the parties hereto), the parties
hereto
covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless the context requires otherwise:
"Agreement" means this Agreement, including the Schedules
attached hereto, and
all instruments supplemental hereto or in amendment or
confirmation hereof;
"Assets" means, collectively, the Real Property, Equipment and
Facility
Information;
"Business Day" means a day other than a Saturday, Sunday or any
statutory
holiday in the Province of Ontario;
"Closing" means the completion of the purchase and sale of the
Assets, to be
held at the offices of the solicitors for the Purchaser in the
City of Toronto
on the Closing Date, in accordance with the terms and conditions
of this
Agreement;
"Closing Date" means 10:00 o'clock a.m. (Toronto time) on the
fifth Business
Day following the execution of this Agreement excluding the day
of execution
or such other date as is agreeable to both parties;
"Equipment" means:
(a) all processing, drying and packaging equipment
(b) all machinery and spare parts
(c) all vehicles/pallet trucks
(d) all laboratory equipment and computer hardware (
other than
that donated to charities at the time of the shut
down)
(e) all furniture and fixtures, and
(f) all other equipment
owned by the Vendor and used in connection with the Facilities
as of the last
day of operation prior to the shut down on September 1, 1996 (
which the
parties agree was June 30, 1996) including, without limitation,
the equipment
listed and described in Schedule "A" attached hereto;
"Facilities" means the starch and gluten manufacturing facility
and adjacent
Saskatchewan Wheat Pool #8 facility located on the Real
Property;
"Facility Information" means all files, records and other
documentation of the
Vendor pertaining to the Facilities (including products made and
processes
used at the Facilities) whether contained in hard copy or on
computer diskette
including, without limitation, the information listed in
Schedule "B";
"Flour Supply Agreement" means the form of supply contract
attached hereto as
Schedule "C";
"GST" means the Goods and Services Tax as provided for in Part
IX of the
Excise Tax Act, R.S.C. 1985, c. E15 as amended;
"Parties" means, collectively, the Vendor and the Purchaser;
"Person" means any individual, corporation, partnership, trust
or
unincorporated association;
"Promissory Note" means the form of promissory note attached
hereto as
Schedule "D";
"Purchase Price" means the purchase price for the Assets
determined in
accordance with sections 2.2;
"Real Property" means the real property described in Schedule
"E" and includes
all buildings, improvements and fixtures located thereon as of
June 30, 1996;
"Security Instruments" means such documents as are reasonably
required to
grant to the Vendor a first ranking security interest in the
Assets under the
Personal Property Security Act (Ontario) and a first charge/
mortgage with
respect to the Real Property.
1.2 Gender and Number
Words importing the singular include the plural and vice versa,
and words
importing gender include all genders.
1.3 Entire Agreement
This Agreement, including the Schedules attached hereto,
together with the
other agreements and documents to be delivered hereunder,
constitute the
entire agreement between the Parties pertaining to the subject
matter hereof
and supersede all prior agreements, understandings, negotiations
and
discussions, whether oral or written, of the Parties and there
are no
warranties, representations or other agreements between the
Parties in
connection with the subject matter hereof except as specifically
set forth
herein and therein. No supplement, modification, waiver or
termination of
this Agreement shall be binding unless executed in writing by
the Party to be
bound thereby. No waiver of any of the terms and conditions of
this Agreement
shall be deemed to or shall constitute a waiver of any other
term or condition
(whether or not similar) nor shall such waiver constitute a
continuing waiver
unless otherwise expressly provided.
1.4 Currency
Unless otherwise indicated, all references in this Agreement to
monies shall
be references to lawful money of the United States.
1.5 Headings
The headings contained herein are included solely for
convenience and are not
intended to be full or accurate descriptions of the contents
thereof and shall
not be considered part of this Agreement.
1.6 Successors and Assigns
This Agreement shall enure to the benefit of and be binding upon
each of the
Parties hereto and their respective successors and assigns, as
the case may
be. Neither party may assign any of its rights or obligations
hereunder
without the prior written consent of the other party, such
consent not to be
unreasonably or arbitrarily withheld or delayed.
1.7 Time of the Essence
Time shall be of the essence of this Agreement.
1.8 Applicable Law
This Agreement shall be governed by and construed in accordance
with the laws
of the Province of Ontario and the laws of Canada applicable
therein.
1.9 Further Assurances
From time to time subsequent to the Closing Date, each party to
this Agreement
covenants and agrees that it will at all times after the Closing
Date, at the
expense of the requesting party, promptly execute and deliver
all such
documents, including, without limitation, all such additional
conveyances,
transfers, consents and other assurances and do all such other
acts and things
as the other party, acting reasonably, may from time to time
request be
executed or done in order to better evidence or perfect or
effectuate any
provision of this Agreement or of any agreement or other
document executed
pursuant to this Agreement or any of the respective obligations
intended to be
created hereby or thereby.
1.10 Schedules
The following Schedules are attached to and form a part of this
Agreement:
Schedule "A" list and description of Equipment
Schedule "B" Facility Information
Schedule "C" form of the Flour Supply Contract
Schedule "D" form of the Promissory Note
Schedule "E" description of the Real Property
Schedule "F" dates and amounts of installment payments
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale
The Vendor hereby agrees to sell, transfer, assign and set over
to the
Purchaser and the Purchaser hereby agrees to purchase and
acquire from the
Vendor the Assets free and clear of all liens and charges except
those set
forth in subsection 4.1(d) (ii), (iii), (iv) and (v), on and
subject to the
terms and conditions of this Agreement. For greater certainty,
the Purchaser
shall have the right to use the Facility Information in
perpetuity.
2.2 Purchase Price and Allocation
The price payable by the Purchaser to the Vendor for the Assets
shall be Five
Million Dollars ($5,000,000) which the parties agree shall be
allocated as
follows:
(a) for the Real Property, the sum of Two Million Dollars
($2,000,000), and
(b) for the Equipment, the sum of Three Million Dollars
($3,000,000).
2.3 Payment of the Purchase Price
The amounts referred to in Section 2.2 shall be paid and
satisfied as follows:
(a) Three Million Dollars ($3,000,000) in installments by wire
transfer of
funds on the dates and in the amounts set out in Schedule
"F" to an
account designated by the Vendor;
(b) The balance of the Purchase Price, being Two Million
Dollars
($2,000,000), by the issuance and delivery on Closing of the
Promissory
Note.
(c) Subject to Section 2.3(d), the Vendor agrees to assign the
Promissory Note
to Southern Ventures Inc. (Nevada) in exchange for voting
common shares of
Southern Ventures Inc. (Nevada) equal to nine percent (9%)
of the issued
and outstanding shares of Southern Ventures Inc. (Nevada) on
a fully
diluted basis; and
(d) In the event that (i) the shares referred to in subsection
2.3(c) are not
delivered to the Vendor by January 16, 1997; (ii) at the
time of delivery
there is not a minimum of twenty million (20,000,000) common
shares of
Southern Ventures Inc. (Nevada) issued and outstanding with
not less than
thirty percent (30%) of such shares listed for public
trading on a U.S. or
Canadian Stock Exchange; or (iii) the initial public
offering was not for
at least two million (2,000,000) common shares of Southern
Ventures Inc.
(Nevada) at a minimum price of Two Dollars ($2.00) per
share, the
Promissory Note shall, in lieu of the issuance of such
shares, be
immediately due and payable in full by the Purchaser to the
Vendor in
cash.
2.4 Adjustments
(a) The Vendor and Purchaser acknowledge that the purchase price
set out in
section 2.2 is based on the equipment used in connection
with the
Facilities as of June 30, 1996. The Vendor and Purchaser
agree to reduce
the portion of the Purchase Price described in subsection
2.3(a) to
reflect any Equipment that is not delivered to the Purchaser
on Closing or
that in any material respect is not as represented and
warranted in
section 4.1. The adjustment for missing equipment will be
based on the
value assigned to such equipment in Schedule "A". The
adjustment for
equipment that in any material respect is not as represented
in section
4.1 will be based on the expense required to remedy same.
(b) Realty taxes, including local improvement rates, shall be
apportioned and
allowed to the Closing Date, the Closing Date to be apportioned
to the
Purchaser.
2.5 GST Provisions
(a) Each of the Vendor and the Purchaser represents and warrants
to the other
that it is duly registered under Part IX of the Excise Tax Act
(Canada) and
shall continue to be a registrant for GST purposes at the
Closing Date. The
GST registration number of the Vendor is BN 100054527 RT 0001
and the GST
registration number of the Purchaser is BN 88616 5166 RT 0001.
Since its
registration, the Purchaser has never ceased to be registered
and is entitled
to produce the election provided by 167(1) of the Excise Tax Act
(Canada).
(b) The Vendor and the Purchaser undertake at the closing to
sign the joint
election prescribed by subsection 167(1) of the Excise Tax Act
(Canada) and
the Purchaser undertakes to file such election in the manner and
within the
time prescribed therefor.
(e) The Purchaser will indemnify and hold harmless the Vendor
for all taxes,
interest, and penalties which the Vendor may be required to pay
should the
joint election described above not be available. Each of the
Vendor and the
Purchaser undertake to notify the other of any notice of
assessment as soon as
practical following receipt. The Vendor will be under no
obligation to
contest any notice of assessment received in this respect but
will cooperate
with the Purchaser should the latter decide to contest such a
notice.
ARTICLE 3
ASSUMPTION OF LIABILITIES
3.1 Excluded Assets and Liabilities
The Vendor hereby acknowledges and agrees that the Purchaser:
(a) is purchasing only the Assets and the Purchaser is not
acquiring any other
assets or property of the Vendor; and
(b) is not assuming any obligation or liability of the Vendor
except as
expressly and specifically provided for in this Agreement.
3.2 Employment Obligation
For certainty, the Purchaser shall assume no responsibility for
any employee
of the Vendor and the Purchaser shall not be obligated to offer
employment to
any employee of the Vendor.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Vendor
The Vendor hereby represents and warrants to the Purchaser, with
the intent
that the Purchaser shall rely thereupon in entering into this
Agreement and in
concluding the purchase and sale contemplated herein, both on
the execution
and delivery of this Agreement and as at the Closing Date
(unless otherwise
specified) as follows:
(a) Status of the Vendor The Vendor is duly incorporated and
validly
subsisting under the laws of its jurisdiction of incorporation,
is validly
extraprovincially registered in each province of Canada in which
it carries on
business (other than its jurisdiction of incorporation, if
applicable), is in
good standing and has all necessary corporate power and capacity
to own and
dispose of the Assets, to execute and deliver this Agreement and
to carry out
the terms and conditions of this Agreement to the full extent;
(b) Authority to Sell The execution and delivery of this
Agreement and the
completion of the transaction contemplated hereby has been duly
and validly
authorized by all necessary shareholder and corporate action on
the part of
the Vendor, and this Agreement constitutes a legal, valid and
binding
obligation of the Vendor, enforceable against the Vendor in
accordance with
its terms except as may be limited by laws of general
application affecting
the rights of creditors;
(c) Conformity with Laws To the actual knowledge of the
directors and
officers of the Vendor and of Xxxxxx-Xxxxxxx-Midland Milling Co.
(including
Xx. Xxxxx Xxxxxx), i) the Vendor has complied, in all material
respects, with
all laws, statutes, ordinances, regulations, rules, judgments,
decrees and
orders applicable to the Facilities, ii) the Equipment currently
complies, in
all material respects, with the requirements of all applicable
laws, statutes,
ordinances, regulations, rules, judgments, decrees and orders,
iii) there are
no outstanding work orders or deficiency notices affecting the
Real Property
and iv) the present use of the Real Property as a starch and
gluten
manufacturing facility and grain handling facility may be
lawfully continued;
(d) Assets The Vendor owns and possesses and has a good and
marketable title
to the Assets free and clear of all registered restrictions,
mortgages, liens,
charges, pledges, security interests, encumbrances or other
claims whatsoever
except for the following:
(i) any registered restrictions or covenants that run with the
Real Property
providing that such are complied with;
(ii) any municipal agreements and registered agreements with
publicly
regulated utilities that run with the Real Property providing
such have been
complied with;
(iii) any minor easements affecting the Real Property for
drainage, storm or
sanitary sewers or for the supply of utility lines, telephone
lines, or other
services to the Real Property provided such easements do not
materially affect
the intended use of the Real Property; and
(iv) any other encumbrances which do not secure or relate to a
debt of the
Vendor or a debt guaranteed by the Vendor and which do not
materially effect
the use of the Assets for their intended purpose.
The Assets are substantially all of the assets that were situate
in or about
the Facilities on June 30, 1996;
(e) Repair The Facilities and Equipment were in working
condition and were
adequate and suitable for the purposes for which they were being
used as of
June 30, 1996 and will be in working condition as of the Closing
Date;
(f) Effect of Sale Neither the execution and delivery of this
Agreement nor
the completion of the purchase and sale contemplated herein will
constitute a
breach by the Vendor of any law, bylaw or regulation of the
Province of
Ontario or of Canada or of any contract or agreement to which
the Vendor is a
party or by which it is bound or which would result in the
creation of any
lien, encumbrance or other charge on any of the Assets;
(g) No Litigation or Proceedings There is no litigation or
administrative or
government proceeding or inquiry pending or to the actual
knowledge of the
directors and officers of the Vendor or of
Xxxxxx-Xxxxxxx-Midland Milling Co.
(including Xx. Xxxxx Xxxxxx) threatened against or relating to
the Assets;
(f) Canadian Resident The Vendor is not a nonresident of Canada
within the
meaning of the Income Tax Act (Canada);
(g) Labour Agreements The Vendor is not party to any agreement
with any
labour union or employee association nor are such agreements
presently under
negotiation nor have any of them made commitments to, or
conducted
negotiations with, any labour union or employee association
regarding any
future agreements relative to the Assets.
4.2 Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Vendor, with the
intent that the
Vendor shall rely thereupon in entering into this Agreement and
in concluding
the purchase and sale contemplated herein, both on the execution
and delivery
of this Agreement and as at the Closing Date (unless otherwise
specified), as
follows:
(a) Status of Purchaser The Purchaser is duly incorporated and
validly
subsisting under the laws of its jurisdiction of incorporation,
is, to the
extent required, extra-provincially registered in each province
in Canada in
which it carries on business (other than its jurisdiction of
incorporation, if
applicable), is in good standing and has all necessary corporate
power and
capacity to execute and deliver this Agreement and to carry out
the terms and
conditions of this Agreement to the full extent; and
(b) Authority to Purchase The execution and delivery of this
Agreement and
the completion of the transaction contemplated hereby has been
duly and
validly authorized by all necessary shareholder and corporate
action on the
part of the Purchaser, and this Agreement constitutes a legal,
valid and
binding obligation of the Purchaser enforceable against the
Purchaser in
accordance with its terms except as limited to laws of general
application
affecting the rights of creditors.
4.3 Survival of the Vendor's Representations, Warranties and
Covenants
To the extent that they have not been fully performed at or
prior to Closing,
all representations, warranties and covenants made by the Vendor
in this
Agreement shall survive the time of Closing and any
investigation at any time
made by or on behalf of the Purchaser and shall continue in full
force and
effect for the benefit of the Purchaser following Closing.
4.4 Survival of the Purchaser's Representations, Warranties and
Covenants
To the extent that they have not been fully performed at or
prior to Closing,
all representations, warranties and covenants made by the
Purchaser shall
survive the time of Closing and any investigation at any time
made by or on
behalf of the Vendor and shall continue in full force and effect
for the
benefit of the Vendor following Closing.
ARTICLE 5
COVENANTS OF THE VENDOR
5.1 Access to the Assets
The Vendor shall forthwith upon execution of this Agreement:
(a) make available to the Purchaser and its authorized
representatives and, if
requested by the Purchaser, provide copies to the Purchaser of
all Facility
Information;
(b) afford the Purchaser and its authorized representatives
every reasonable
opportunity to have free and unrestricted access to the Assets
to conduct such
tests and investigations, at its expense, as it deems relevant;
and
(c) at the request of the Purchaser, execute such consents,
authorizations and
directions as may be necessary to enable the Purchaser or its
authorized
representatives to obtain full access to all files and records
relating to any
of the Assets maintained by governmental or other public
authorities;
The exercise of any rights of inspection by or on behalf of the
Purchaser
under this section shall not mitigate or otherwise affect any of
the
representations and warranties of the Vendor hereunder, which
shall continue
in full force and effect as provided in section 4.3. Any damage
to the Assets
occasioned by the tests and investigations referred to in
section 5.1(b) shall
be for the account of the Purchaser.
5.2 Ordinary Course
From and after the execution and delivery of this Agreement
until the Closing,
the Vendor shall maintain the Assets in accordance with good
practice.
5.3 Insurance
From the date of this Agreement until the Closing, the Vendor
shall maintain
in full force and effect current policies of insurance in
respect of the
Assets.
5.4 Permits and Licenses
The Vendor shall assist the Purchaser in obtaining or
transferring to the
Purchaser any and all licenses and permits of the Vendor
required by any
municipal, federal or provincial law, bylaw and regulation for
the operation
of the Assets. Any transfer fees relating to such licenses or
permits payable
in connection therewith shall be for the account of the
Purchaser.
5.5 Indemnity
The Vendor agrees to indemnify and hold harmless the Purchaser
from and
against:
(a) any and all liabilities of the Vendor, whether accrued,
absolute,
contingent or otherwise, as a result of or arising directly or
indirectly out
of or in connection with any employees or former employees of
the Vendor whose
employment is not agreed to be assumed by the Purchaser pursuant
to the terms
and conditions of this Agreement;
(b) any and all damage or deficiencies resulting from any
misrepresentation,
breach of warranty or nonfulfilment of any covenant on the part
of the Vendor
under this Agreement;
(c) any breach or non-performance by the Vendor of any covenant
to be
performed by it that is contained in this Agreement or in any
agreement,
certificate or other document delivered pursuant hereto;
(d) any and all liabilities, claims, damages or losses suffered
or incurred by
the Purchaser as a result of or arising from the failure of the
Vendor to
comply with the requirements of any applicable bulk sales
legislation in
respect of the purchase and sale of the Assets; and
(e) any and all actions, suits, proceedings, demands,
assessments, judgments,
orders, costs and reasonable legal and other expenses incident
to any of the
foregoing.
except to the extent the Vendor has been prejudiced by the
Purchaser's failure
to notify the Vendor of such liability, damage, breach or claim
within a
reasonable period of time following the Purchaser becoming aware
of same.
Notwithstanding anything in this Agreement to the contrary, the
Vendor
acknowledges notice of and agrees to indemnify and hold harmless
the Purchaser
from and against any liability or claim arising in connection
with the
purported transfer of lots 10 and 11, Plan W-778 City of Thunder
Bay from
Saskatchewan Pool Elevators Limited to Saskatchewan Wheat Pool
by instrument
number 178490 and the purported transfer of lots 10 and 11, Plan
W-778 City of
Thunder Bay from Saskatchewan Wheat Pool to 976088 Ontario Inc.
by instrument
number 337332.
5.6 Flour Supply Agreement
The Vendor shall execute the Flour Supply Agreement prior to or
at Closing.
ARTICLE 6
COVENANTS OF THE PURCHASER
6.1 Taxes
The Purchaser shall be liable for all provincial sales/transfer
taxes, if any,
with respect to the purchase of the Equipment and Real Property
hereunder and
shall pay the same to the provincial collection authorities
within the time
prescribed by the laws of the Province of Ontario. The
Purchaser acknowledges
that notwithstanding any other term or condition of this
Agreement, the
Purchase Price is exclusive of GST and the Purchaser shall pay
the same in
addition to the amounts payable hereunder when due and payable.
6.2 Unpaid Purchase Price
The Purchaser covenants to execute the Promissory Note and the
Security
Instruments prior to or at Closing.
6.3 Flour Supply Agreement
The Purchaser covenants to execute the Flour Supply Agreement
prior to or at
Closing.
6.4 Insurance
From the Closing date until the Purchase Price has been paid in
full, the
Purchaser shall:
(a) maintain the Assets in at least as good a condition as when
the Purchaser
took possession, ordinary wear and tear excepted;
(b) maintain general liability and "all risk" property insurance
with respect
to the Assets and their operation, which insurance shall name
the Vendor as an
additional insured party (primary to any insurance maintained by
the Vendor)
and as loss payee ("all-risk" property insurance only) and be in
such amounts
and with such companies as is reasonably acceptable to the
Vendor; and
(c) except as otherwise expressly provided for herein, defend,
indemnify and
hold the Vendor, its affiliated companies and their respective
directors,
officers, employees and agents harmless from and against any and
all claims,
demands, actions, causes of action, judgments, awards, fees
(including
attorney's fees), costs and any other liability whatsoever
arising out of or
in any way connected with the Assets and occurring or accruing
on or after the
Closing Date excepting any such claim, demand, action, cause of
action,
judgment, award, fee, cost or other liability to the extent same
is caused by
the negligence or willful default of the Vendor, its affiliated
companies or
their respective directors, officers, employees or agents.
ARTICLE 7
CONDITIONS PRECEDENT
7.1 Conditions Precedent to the Obligation of the Purchaser
The obligation of the Purchaser to complete the agreement of
purchase and sale
of the Assets on and subject to the terms and conditions of this
Agreement
shall be subject to the following conditions precedent that:
(a) the Vendor's representations and warranties contained in
this Agreement
shall be true in all material respects at and as of the time of
Closing as if
such representations and warranties were made at and as of such
time;
(b) the Vendor shall have performed and complied with all of the
terms and
conditions of this Agreement to be performed or complied with by
the Vendor
prior to or at the time of Closing;
(c) the Vendor shall have delivered to the Purchaser a
certificate of an
authorized signatory of the Vendor dated the time of Closing,
certifying (in
such detail as the Purchaser may reasonably specify) to the
fulfilment of the
conditions set forth in subsections 7.1(a) and (b) hereof;
(d) the Purchaser shall be satisfied that i) all necessary
approvals,
licenses, certifications, authorizations and permits required
for the uses to
which the Assets will be put by the Purchaser have been obtained
by the
Purchaser, ii); there is no litigation or administrative or
government
proceeding or inquiry threatened against or relating to the
Assets or their
intended use or any basis for any such action, iii) there is no
contaminant in
the air, the ground or in other improvements in the areas or
vicinities where
any of the Assets are (or were) located or elsewhere on the Real
Property and
there has been no release of any contaminant as a result of the
operation of
the Assets other than as may have been done in compliance with
all laws,
bylaws and regulations relating to the environment and iv) all
wastes and
other materials and substances disposed of, treated or stored
utilizing the
Assets, whether a contaminant or not, have been disposed of,
treated and
stored in compliance with all laws, bylaws and regulations in
effect at the
applicable time;
(e) the Purchaser shall be satisfied that the Facilities comply,
in all
material respects, with all laws, statutes, ordinances,
regulations, rules,
judgments, decrees, orders and restrictive covenants applicable
to the
Facilities, ii) the Equipment currently complies, in all
material respects,
with the requirements of all applicable laws, statutes,
ordinances,
regulations, rules, judgments, decrees, orders and restrictive
covenants, iii)
there are no outstanding work orders or deficiency notices
affecting the Real
Property, iv) the present use of the Real Property as a starch
and gluten
manufacturing facility and grain handling facility may be
lawfully continued,
v) the Facilities and Equipment do not encroach on any property
owned by
others and vi) the rights of ingress and egress to the Real
Property are
adequate for the intended use of the Real Property; and
(f) the Purchaser shall be satisfied that the Vendor has not
knowingly
withheld from the Purchaser any facts relating specifically to
the Assets
which, considered as a whole, would be adverse to the Purchaser,
except facts
which are public information or are generally known in the
industry in which
the Vendor operates.
7.2 Benefit of Purchaser's Conditions Precedent
Each of the conditions precedent set forth in section 7.1 hereof
is for the
exclusive benefit of the Purchaser and any such condition
precedent may be
waived in whole or in part by the Purchaser at or prior to the
time of Closing
by notice in writing to the Vendor.
7.3 Conditions Precedent to the Obligation of the Vendor
The obligation of the Vendor to complete the agreement of
purchase and sale of
the Assets on and subject to the terms and conditions of this
Agreement shall
be subject to the following conditions precedent that:
(a) the Purchaser's representations and warranties contained in
this Agreement
shall be true at and as of the time of Closing as though such
representations
and warranties were made as of such time;
(b) the Purchaser shall have performed and complied with the
terms and
conditions of this Agreement to be performed or complied with by
the Purchaser
at or prior to the time of Closing; and
(c) the Purchaser shall have delivered to the Vendor a
certificate of an
authorized signatory of the Purchaser dated the time of Closing,
certifying
(in such detail as the Vendor may reasonably specify) to the
fulfilment of the
conditions set forth in subsections 7.3(a) and (b) hereof.
7.4 Benefit of Vendor's Conditions Precedent
Each of the conditions precedent set forth in section 7.3 hereof
is for the
exclusive benefit of the Vendor and any such condition precedent
may be waived
in whole or in part by the Vendor at or prior to the time of
Closing by notice
in writing to the Purchaser.
7.5 Planning Act
This Agreement shall be effective to create an interest in the
property only
if the Vendor complies with the subdivision control provisions
of the Planning
Act by Closing and the Vendor covenants to proceed diligently at
his expense
to obtain any necessary consent by Closing.
ARTICLE 8
CLOSING
8.1 Time of Closing
Subject to the terms and conditions hereof, the purchase and
sale of the
Assets shall be completed at the Closing on the Closing Date.
8.2 Documents to be Delivered by the Vendor
The Vendor shall deliver or cause to be delivered to the
Purchaser's
solicitors on the Closing Date:
(a) all conveyances and transfers in form and content
satisfactory to the
Purchaser including the statements contemplated by Section
50(22) of the
Planning Act, appropriate to effectively vest a good and
marketable title to
the Assets in the Purchaser to the extent contemplated by this
Agreement, and
immediately registrable in all places where registration of such
instruments
is required;
(b) all consents or approvals, required to be obtained by the
Vendor for the
purpose of validly assigning the Assets or any part thereof;
(c) possession of the Assets, including vacant possession of the
Real Property
and, except as otherwise indicated by the Purchaser, all
Facility Information;
(d) the certificate of the Vendor to be given under paragraph
7.1(c) hereof;
(e) duly executed unconditional and registrable discharges, or
evidence to the
satisfaction of the Purchaser, acting reasonably, as to
discharge or
termination of any and all obligations and liabilities which the
Purchaser has
not agreed to assume and which may be enforceable against any of
the Assets;
(f) sworn declaration of possession by an officer of the Vendor
in a form
satisfactory to the Vendor's counsel and Purchaser's counsel;
(g) the Flour Supply Agreement duly executed by the Vendor; and
(h) such other documents, instruments or other writings in form
and content
satisfactory to the Purchaser acting reasonably required to give
effect to the
provisions of this Agreement.
8.3 Documents to be Delivered by the Purchaser
On the Closing Date the Purchaser shall deliver or cause to be
delivered to
the Vendor's solicitors:
(a) a wire transfer of funds to an account designated by the
Vendor for the
portion of the Purchase Price payable on the Closing Date;
(b) the certificate of the Purchaser to be given under paragraph
7.3(c)
hereof;
(c) the Promissory Note and the Security Instruments duly
executed by the
Purchaser;
(d) the Flour Supply Agreement duly executed by the Purchaser;
and
(e) such other documents, instruments or other writings in form
and content
satisfactory to the Vendor acting reasonably required to give
effect to the
provisions of this Agreement.
8.4 Deliveries and Trust Conditions
Any documents or money required to be delivered or paid
hereunder may be
delivered or paid to the Parties or their respective solicitors
on such trust
conditions (for similar commercial transactions in Toronto,
Ontario) as may be
agreed to by the vendor's solicitors and the purchaser's
solicitors, acting
reasonably.
ARTICLE 9
GENERAL
9.1 Risk of Loss
From the execution and delivery of this Agreement until the time
of Closing,
the Assets shall be and remain at the risk of the Vendor. In
the event of
substantial damage prior to Closing, the Purchaser may either
terminate this
Agreement or take the proceeds of any insurance and complete the
transaction.
No insurance will be transferred on Closing.
9.2 Notices
Any notice or other communication required or permitted to be
given hereunder
to any party shall be in writing and shall be given by facsimile
or other
means of electronic communication or by hand delivery as
hereinafter provided.
Any such notice or other communication, if sent by facsimile or
other means of
electronic communication, shall be deemed to have been received
on the first
Business Day following the sending, or if delivered by hand
shall be deemed to
have been received at the time it is delivered to the applicable
address noted
below either to the individual designated below or to an
individual at such
address having apparent authority to accept deliveries on behalf
of the
addressee. Notice of change of address or name shall also be
governed by this
section. Notices and other communications shall be addressed as
follows:
the Vendor ADM Agri-Industries, Ltd.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000 0000
with a copy
to: Xxxxxx-Xxxxxxx-Midland Company
X.X. Xxx 0000
Xxxxxxx, Xx. 00000
Attention: General Counsel
Telecopier: (000) 000 0000
the Purchaser Riverside Grain Products Inc.
and SVI: c/o Xxxxxxx Xxxxx
BCE Place, 000 Xxx Xxxxxx
Xxx Xxxxxxxxxx Tower
Suite 4220, X.X. Xxx 000
Xxxxxxx, Xxxxxxx
Attention: Xxxxxxx X. Xxxxx
Telecopier: 000 000 0000
9.3 Announcements
No announcement with respect to this Agreement will be made to
any person by
the Vendor or the Purchaser without the prior written consent
and approval of
the other. Notwithstanding the foregoing, the Purchaser may
disclose the
existence of this Agreement to those persons the Purchaser deems
necessary in
order to procure any required licenses, permits or approvals or
to procure
contracts with suppliers, purchasers or labourers.
9.4 Confidentiality
Except with the express written consent of the other party first
had and
obtained, a party shall not disclose orally or in writing to any
third party
the subject matter of the negotiations between the Purchaser and
the Vendor or
any information received from the other party in connection with
the
transaction except as required to satisfy the conditions
precedent and the
parties shall retain this Agreement and any other relevant
material as
confidential. Such information will be distributed to the
employees of the
Vendor and Purchaser on a need to know basis only. The parties
acknowledge
that the existence of an agreement in principle has been
disclosed to various
government and political officials in Thunder Bay, Ontario.
9.5 Expenses
The parties shall each bear their own expenses with respect to
the transaction
contemplated by this Agreement.
9.6 Counterparts and Execution and Delivery
This Agreement may be executed in counterparts, each of which
when so executed
shall be deemed to be an original and such counterparts together
shall
constitute one and the same instrument, which shall be
sufficiently evidenced
by any such original counterpart. Each of the Parties
acknowledges and agrees
that delivery of a facsimile or other means of electronic
communication of
this Agreement executed by any Party, without any further act by
such Party,
shall be satisfactory and valid execution and delivery of this
Agreement by
that Party.
9.7 Guarantee by SVI
SVI represents that it is the registered and beneficial owner of
all of the
issued shares of the Purchaser. SVI warrants that the
representations and
warranties of the Purchaser are true and guarantees the timely
performance of
all of the Purchaser's obligations under this Agreement. The
representations,
warranties and covenants of SVI shall survive the time of
Closing and shall
continue in full force and effect for the benefit of the Vendor
following
Closing. The Vendor shall not be bound to exhaust its recourse
against the
Purchaser before being entitled to pursue its remedies against
SVI. SVI
waives any right to require the Vendor to proceed against the
Purchaser.
IN WITNESS WHEREOF the Parties hereto have executed this
Agreement as of
the day and year first above written.
ADM AGRI-INDUSTRIES, LTD. RIVERSIDE GRAIN PRODUCTS
INC.
Per: "X.X. Xxxxx" Per: "Xxxxx Xxxxxxxx"
Per: "X.X. Xxxxxxx"
SOUTHERN VENTURES, INC.
Per: "X. X. Xxxx"
Per:
SCHEDULE "A"
LIST AND DESCRIPTION OF EQUIPMENT
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN
VENTURES, INC. DATED AS OF NOVEMBER 11, 1997
SCHEDULE "B"
FACILITY INFORMATION
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN VENTURES, XXX.XX OF NOVEMBER 11, 1997
1. All files related to operation and maintenance of the plant,
eg.:
-plant operation, training and safety manuals
-starch, gluten and waste treatment equipment specifications,
warranties,
operating and maintenance procedure manuals
-plant drawings including blue prints, technical drawings and
designs
2. Maintenance and equipment files including Affidavits of
Manufacture for
all tanks and other pressure vessels
3. Laboratory files including all files relating to process and
finished
product
4. All files related to service contracts for the plant
-rail siding agreements
-rail shipping agreements
-chemical supply agreements
-hydro and natural gas agreements
5. All files related to financial aspects of the plant
-annual/monthly/daily production and sales records
6. All files related to regulatory compliance of the plant
-water supply
-waste treatment and discharge
-municipal, provincial and federal taxation
7. Real property files including surveys
8. Supplier files and records
9. Proprietary manufacturing information and knowhow,
instruction manuals,
inventions, inventor's notes, research data, formulae,
processes, trade
secrets, and any other technology or intellectual property
necessary for the
Purchaser to operate the Facilities.
SCHEDULE "C"
FLOUR SUPPLY AGREEMENT
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN VENTURES, XXX.XX OF NOVEMBER 11, 1997
FLOUR SUPPLY AGREEMENT
THIS AGREEMENT made as of the day of , 1997.
B E T W E E N:
ADM AGRI-INDUSTRIES, LTD.
(hereinafter called "the Supplier")
OF THE FIRST PART
A N D:
RIVERSIDE GRAIN PRODUCTS INC.
(hereinafter called "the Consumer")
OF THE SECOND PART
1. Supply
1.1 The Supplier agrees to sell to the Consumer and the Consumer
agrees to buy
from the Supplier all flour requested by the Consumer during the
term of this
Agreement on the following terms and conditions.
1.2 The Supplier agrees to supply straight-run flour at 11.5
pro-min (the
"Product").
1.3 Title to and risk of loss of the Product shall pass to the
Consumer on
delivery of the Product into Consumer's facility located at 000
Xxx Xxxxxxx,
Xxxxxxx Xxx, Xxxxxxx (the "Facility").
2. Term of Agreement
2.1 This Agreement shall be for a period of five (5) years
commencing on the
1st day of October, 1997 to and including the 30th day of
September, 2002.
2.2 This Agreement shall thereafter be automatically renewed for
successive
periods of one (1) year each on the same terms and conditions as
contained
herein unless written notice of termination is delivered by
either party to
the other not less than one (1) year prior to expiration of the
initial term
herein or ninety (90) days prior to the expiration of any
renewal term, as the
case may be.
3. Price
3.1 The initial milling conversion fee for each unit of Product
delivered to
the Consumer will be Seventy-five Dollars ($75.00). The milling
conversion
fee shall be reviewed and subject to adjustment annually. An
example of the
total price formula for each unit of Product is attached as
Appendix A, which
is attached hereto, and by this reference is incorporated herein.
3.2 The Consumer agrees that the terms of payment shall be net
ninety (90)
days from the date of delivery. Late Charges maybe applied to
overdue
accounts at the rate of 1% per month, compounded monthly.
3.3 All Prices herein are exclusive of all taxes, fees, duties
or charges
imposed by any lawful authority upon the purchase and sale of
the Product
hereunder; such taxes, fees, duties or charges being for the
account of the
Consumer.
3.4 All references in this Agreement to monies shall be
references to lawful
money of Canada.
4. Delivery
4.1 Deliveries shall be made into the Facility.
5. Insurance/Liability/Indemnity
5.1 During the term of this Agreement or any renewal thereof,
the Supplier and
the Consumer shall, each at its own expense, maintain
comprehensive general
liability insurance for bodily injury, death and property damage
(including
products liability insurance) with a limit of not less than Five
Million
Dollars ($5,000,000.00) per occurrence.
5.2 The Supplier shall be liable for and shall indemnify the
Consumer against
all claims, demands, losses or damages caused by or attributable
to the
Product or its transportation, handling, care, storage, resale
or other use,
which accrue prior to delivery to the Consumer, unless caused by
the
negligence or non-performance of this Agreement by the Consumer.
The Consumer
shall bear all risk, be solely liable for and indemnify the
Supplier against
all claims, demands, losses or damages caused by or attributable
to the
Product, which accrue after delivery to the Consumer, unless
caused by the
negligence or non-performance of this Agreement by the Supplier.
6. Other
6.1 Any notice contemplated pursuant to this Agreement may be
given by the
Consumer or the Supplier to the other and such notice may be
delivered
personally or by mail. Notice, if delivered personally, shall
be deemed to
have taken place on the date delivered; if by mail, delivery
shall be deemed
to have taken place five (5) business days after date of
mailing. Notice to
the parties shall be directed as follows:
if to the Supplier:
ADM Agri Industries, Ltd.
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxxx, Xxxxxxx
Attn: Xxxx Xxxxxxx
Telecopier:
if to the Consumer:
Telecopier:
6.2 The Supplier and the Consumer agree that neither shall be
liable in
damages or otherwise nor shall this Agreement be cancelled for
failure to
carry out the terms of the Agreement in whole or in part, caused
directly or
indirectly by or in consequence of the action of any
governmental or other
similar authority or the enforcement of any regulation or by
fire, storm,
flood, or rebellion, insurrection, riots, civil commotion or any
other event
beyond the reasonable control of the Supplier or the Consumer.
6.3 This Agreement shall be governed by the laws of the Province
of Ontario.
6.4 This Agreement may not be assigned by either party without
the express
written consent of the other party, which consent shall not be
unreasonably
withheld.
6.5 Upon failure of either party to comply with any of the terms
or conditions
in this Agreement, the other party may provide written notice
("Default
Notice") to the defaulting party specifying any such failure and
suspend
further performance on its part until such term or condition has
been complied
with. If the defaulting party fails to rectify the failure
specified in the
Default Notice within thirty (30) days or receipt of the Default
Notice, the
non-defaulting party may, without prejudice or waiver of any of
its legal
remedies, terminate this Agreement by written notice to the
defaulting party.
6.6 The failure of either party to exercise any right granted
hereunder shall
not impair or be deemed to be a waiver of such part's privilege
of exercising
such right at any subsequent time or times, except where
specifically stated.
6.7 This contract forms the entire agreement between the parties
and any
amendments thereto shall be mutually agreed upon in writing.
6.8 The parties acknowledge that there are no representations or
warranties
other than those obtained in this Agreement.
IN WITNESS WHEREOF the parties have hereunto affixed their
corporate seals
under the hands of their proper officers duly authorized in that
behalf as of
the date first above written.
ADM AGRI-INDUSTRIES, LTD.
Per: "X.X. Xxxxx"
Per:
RIVERSIDE GRAIN PRODUCTS INC.
Per: "Xxxxx Xxxxxxxx"
Per:
APPENDIX A
ALL COSTS IN CANADIAN $
Wheat (Minneapolis futures @ T. Bay) $205.98 To reflect time
period booked
Basis (established by Canadian Wheat Board) 0 Current value
to meet
preferred specifications
Extraction (wheat/flour) 1.38 Metric tonnes
of wheat to
yield 1 MT flour (CWB standard)
Gross Wheat (/MT Flour $284.25
Millfeed value ($/MT) $80.00 Values
reflecting time
period booked (mutually agreed)
Millfeed Credit (.38 MT) ($30.40)
Net Bulk Flour Cost $253.85
Conversion Fee
$75.00 Covering all costs of wheat
acquisition,
manufacture, administration &
outbound freight
(to be reviewed annually)
Net delivered flour cost $318.85
Volume (MT) 0 Volume &
delivery period to
be specified
at time of
booking
Contract No. To be established
for each booking
SCHEDULE "D"
FORM OF PROMISSORY NOTE
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN
VENTURES, XXX.XX OF NOVEMBER 11, 1997
SCHEDULE "E"
DESCRIPTION OF REAL PROPERTY
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN
VENTURES, XXX.XX OF NOVEMBER 11, 1997
1) Lots 1 to 16, Plan W-778
2) Part 1 on Reference Plan 9453 (Lots 53 to 60, Plan W-78 aka
1389)
3) Parcels 3543 and 3544 (Lots 17 to 21, Plan M-81)
4) Any rights of the Vendor to any adjoining water lot.
SCHEDULE "F"
DATE AND AMOUNTS OF INSTALLMENT PAYMENTS
ATTACHED TO AND FORMING PART OF THE AGREEMENT BETWEEN
ADM AGRI-INDUSTRIES, LTD., RIVERSIDE GRAIN PRODUCTS INC. AND
SOUTHERN
VENTURES, XXX.XX OF NOVEMBER 11, 1997
