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: "Xxxxx Xxxxxx"
Per: "Xxxxxx Xxxxx"
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:"N/A"
RIVERSIDE GRAIN PRODUCTS INC.
Per:"Xxxxx Xxxxxxxx" 11/18/97
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
