Sale Agreement of asset
elements
between Carrieres Polycor
Inc
and
Rock of Ages Canada
Inc.
TABLE
OF CONTENTS
1.
INTERPRETATION
1.1
Definitions
1.2
Titles and clauses
1.3
Type and number
1.4
Exhibits
1.5
Renunciation, modification
1.6
Applicable laws
2. PURCHASE AND
SALE
3. PURCHASE
PRICE
3.1
Purchase price
3.2
Adjustments
3.3
No liability intake
4. PURCHASE
PRICE TERMS AND CONDITIONS
4.1
Payment terms and conditions
4.2
Guaranteed deposit
4.3
Title search
4.4
Environmental verification
4.5
Guaranteed deposit remittance
4.6
Regulations with regards to the guaranteed deposit and to the
trustee
5. SELLER
DECLARATIONS AND GUARANTEES
5.1
Seller declarations and guarantees
5.2
Declarations and guarantees of asset elements
5.3
Compliance with environmental relative laws
5.4
Survival of declarations and guarantees
6. BUYER
DECLARATIONS AND GUARANTEES
6.1
Declarations and guarantees
6.2
Survival of declarations and guarantees
7.
COMPENSATION
8. COMMITMENTS
BETWEEN PARTIES
8.1
Buyer' commitments
8.2
Seller's commitments
8.3
Party's commitments
8.4
Follow up of commitments
9.
NOTICE
9.1
Notice
9.2
Receipt of notice date
10.
GENERAL PROVISIONS
10.1 Cost and
fees
10.2
Deadline
SALE AGREEMENT OF
ASSET ELEMENTS
BETWEEN:
CARRIERES POLYCOR INC , a legal
corporate entity, with a head office situated at 138, Saint-Pierre
street in Quebec, Province of Quebec, G1K 8B9, represented by
Charles Belzil, vice president of the board of director and chief
financial director of the company, duly authorized hereinafter
called: (THE SELLER)
AND:
ROCK OF AGES CANADA INC ,
a legal corporate entity, with a head office situated at 1 Place
Ville-Marie, bureau 4000, in Montreal, province of Quebec, H3B 4M4,
represented by Gabriel Ouellet, director of finance and operations,
duly authorized hereinafter called (THE BUYER)
1
.
INTERPRETATION
1.1 Definitions
For the purpose of
the present, and also in all documents related or referred to,
unless of an opposite context, the following words, terms and
expressions will signify:
1.1.1. "Deed of sale of the immoveable property
" signifies the attached deed of sale in exhibit 8.3 to the
present;
1.1.2. "Agreement" signifies the present
agreement and all exhibits, in each case as they can be amended or
completed from time to time, and the expressions "the presents",
"in the presents", "to the presents" "in pursuance to the presents"
by the presents" and other similar expressions are referred to this
agreement; and, unless contrary indication, references to
paragraphs and articles are references to paragraphs and articles
of this agreement.
1.1.3. "Asset elements" signifies asset elements
described in article 2 of in the present;
1.1.4. "Immoveable property" signifies part of
lot 362 in Canton of Stanstead, in the Stanstead district which is
fully described in the Deed of Sale of the immoveable property, and
all other buildings or structures established on the said lot;
1.1.5. "Inventory" signifies the granite blocks
that are actually found on the property with the exclusion of the
granite blocks sold by the Seller as of March 31, 2009 and listed
on exhibit 8.2.3. of the presents; for the purpose of
establishing an inventory sale price, a list of granite blocks
category 1, 11, and 111 is enclosed to the present;
1.1.6. "Purchase price" signifies the purchase
price of the asset elements stipulated in article 3 below subject
to the provisions of article 4 of the presents;
1.1.7. "Title irregularities" designate,
collectively, (i) any irregularities in the chain of titles of the
property; (ii) any charge, priority, mortgage, security or
any actual rights (except public utility right of way allocated to
the property but does not prevent its utilization or its
exploitation), charges mentioned in paragraph 5.2.1 and rights
mentioned in paragraph 5.2.10 if these are not erased in a
stipulated deadline; (iii) any legislative or statutory
provision federal, provincial, municipal or other, or the rights of
a third party that prevent the Seller to dispose of the property in
favor of the Buyer ; and (iv) any relative authorization to the
sale of the property required from a third party or any commission,
agency or other governmental group that was not obtained.
1.2
Titles and clauses
Titles and clauses
or paragraphs are inserted to the presents only for reference
purposes and cannot be used to interpreter the content of this
agreement.
1.3 Type
and number
The masculine
include the feminine, the singular include the plural and vice
versa.
1.4
Exhibits
1.5
The following documents are enclosed as exhibit to the present
agreement:
Exhibit
1.1.5
Inventory
Exhibit
3.1.2
Inventory sale price
Exhibit
3.3
Addendum to the sale agreement of asset elements
Exhibit
5.2.12 Commercial
names
Exhibit
8.1.1.
Supply agreement
Exhibit
8.2.1
Non-competition agreement
Exhibit
8.2.3
Granite blocks belonging to the Seller
Exhibit
8.3
Deed of sale of the property
1.6
Renunciation, modification
Only if expressly
anticipated in the present agreement, no modification or
renunciation to the present agreement will bind a party unless it
is recorded in writing and signed by the binding party. A
renunciation to a provision of the present agreement does not
constitute a renunciation to any other provision to the present
agreement and no renunciation to a provision of the present
agreement will constitute a renunciation to bring it up in the
future unless of an expressed provision to this effect.
1.7
Applicable laws
The present
agreement is controlled and interpreted according to Quebec and
Canada applicable laws.
2.
PURCHASE AND SALE
Under reserved provisions of the
present agreement, the Seller sells to the Buyer all moveable and
immoveable properties and all corporate and incorporate rights
listed below:
a) Immovable
property
b)
All inventory
c) All
rights in all the intellectual property used by the Seller for the
exploitation of the property (except for those under the name
"Polycor") notably the names "Gris de Stanstead", Stanstead Grey",
"Stanstead Gray, "Mistigri" and "Misty Grey"
d) all
their rights in all permits, certificates and transferable licenses
necessary to the exploitation of the property notably, certificates
given by the Minister of Environment, if
needed;
e) all
rights in mining rights, mining claims and exploitation leases that
the Seller has with regards to the exploitation of the
property.
3.
PURCHASE PRICE
3.1 Purchase
price
Under conditions, restrictions, representations, guaranties,
engagements and clauses of the presents, the purchase price to
acquire the asset Elements is an amount equal to the total of the
following amounts:
3.1.1 As
for the asset elements other than the inventory, an amount of ONE
MILLION DOLLARS )1 000 000 000 $) distributed as follow:
a) ONE HUNDRED THOUSAND DOLLARS (100
000 $) for the immoveable property
b) NINE HUNDRED THOUSAND DOLLARS (900
000 $) for the exploitation rights of the granite reserves
c) As for the inventory, the
anticipated amount is in exhibit 3.1.2 .
3.2
Adjustments
School and municipal taxes with regards to the property and
municipal taxes collected in favor of quarry operators are subject
to an adjustment dated as of the present; in the
eventuality that other adjustments are necessary, they will also be
made as of the present date according to the provisions of the Deed
of Sale of the Property.
3.3
No liability intake
Under paragraph 4.4.1 and 4.4.2 of the presents, it is understood
between parties that the Buyer does not assume any liability intake
from the Seller, neither debt or obligation,
of any nature it may be, related or not to asset Elements,
including, without restricting the general significance of the
above, any loan, accounts payable, fiscal responsibility for income
taxes paid or not, any responsibility deriving or related directly
or indirectly to the exploitation of the Seller's
enterprise on the
property including all responsibilities regarding employees, any
environmental responsibility or any other responsibility and the
Seller commits himself, by the following, to compensate the Buyer
and to cover any damages, expenses, costs, finds, condemnation,
responsibility or judgment with regards to all of the above
according to article 7 of the presents subject to provision in
exhibit 3.3 of the presents.
4.
PURCHASE PRICE TERMS AND CONDITIONS
4.1
Payment terms and conditions
The
purchase price is payable according to the following methods of
payment
4.1.1. Jointly at the
signature of the presents, the Buyer pays the Seller, as a partial
payment of the Purchase Price, the sum of ONE MILLION TWO HUNDRED
NINETEEN THOUSAND SIX HUNDRED SEVENTY FIVE THOUSAND DOLLARS AND 84
cents (1 219 675.84 $) of which the Buyer will acknowledge receipt
and give full discharge;
4.1.2. the balance of the
purchase Price, that is ONE HUNDRED THOUSAND (100 000 $) which will
be payable according to the provisions of paragraph 4.5 of the
presents,
4.2
Guaranteed deposit
The parties agree to
deposit in favor of Lavery, de Billy, S.E.N.C.R.L. ( the
"Consignee") in trust, the sum of one hundred thousand dollars
(100 000 $) (the guaranteed deposit) will have to be
invested as a term deposit in a Canadian chartered bank until it is
handed over according to the presents. The guaranteed Deposit
will be paid to the Seller when the Deed of sale of the property is
published to the index of the properties without any adverse
entries and according to the clauses of paragraph 4.5 of the
presents.
As long as a
decision has not been made on the guaranteed Deposit according to
provisions of paragraphs 4.3 and 4.4, the Buyer cannot exploit the
property being understood that the Buyer can exploit the property
after this waiting period and it is also understood that the Seller
cannot assert his rights of usufruct indicated in the supply
agreement during this period during which the Buyer cannot exploit
the property according to the above.
4.3
Title search
The buyer
will have until May 31, 2009 to proceed, at his own expense, to the
examination of the property titles. In the scope of the
titles' examinations, the following provisions will apply:
4.3.1 If such an
examination does not reveal any title irregularities and charges
referred to in paragraph 5.2.1. and rights referred to in paragraph
5.2.10 were removed within the deadline period and, no later than
May 31, 2009 for the usufruct and the first refusal right granted
to Tuile Grani-Décor Inc. published at the public rights
office of the district of Stanstead under number 163 847, then the
guaranteed Deposit and accrued interest will be handed over to the
Seller statutory under the provisions of paragraph 4.4 of the
presents.
4.3.2 However, if such an
examination reveals titles irregularities, including charges
referred to in paragraph 5.2.1.and rights referred to in paragraph
5.2.10 and if they are not removed within the prescribed deadline
and, no later than May 31, 2009 as for the usufruct and the first
refusal right granted to Tuile Grani-Décor Inc. published at
the public rights office of the district of Stanstead under number
163 847, then a portion of the guaranteed Deposit will be kept by
the Consignee until correction of title irregularities are
revealed. The Seller and the Buyer will reasonably determine
the portion of the guaranteed Deposit that will be kept by the
Consignee, according to the nature of the title irregularities that
are left to cross off and reasonable costs to guarantee the Buyer
that the Seller will proceed to their correction according to
paragraph 4.3.3. However, if the titles Irregularities that
are left to cross off are either the first refusal right granted to
Tuile Grani-Décor Inc and published under number 163 847 or
the first refusal right granted to Granit Bussiere Inc and
published under number 146 212, then the entire amount of the
guaranteed Deposit will be kept by the Consignee until the said
rights are rectified to the Buyer's satisfaction.
4.3.3 In the event that
such an examination reveals title irregularities, including changes
referred to in paragraph 5.2.1 and rights referred to in paragraph
5.2.10 if these were not removed within the prescribed deadline
and, no later than May 31, 2009 for the usufruct and the first
refusal right granted to Tuile Granit-Décor Inc. published
at the public rights office of the district of Stanstead under
number 163 847, the Buyer will advise the Seller in writing and the
later is compelled by the following to rectify at his own cost the
alleged title Irregularities to the Buyer's satisfaction and this,
within 30 days following the Buyer's notice (or a longer deadline
if the title Irregularities cannot reasonably be corrected within
the 30 day deadline as long as the Seller undertakes the necessary
corrections of the title Irregularities in a diligent
manner). If the Seller cannot, refuses or neglects to correct
such title Irregularities within the time allowed (or any other
time frame agreed to between parties), the Buyer can proceed, at
the Seller's cost, to the correction of the titles and the related
costs and expenses incurred by the Buyer, increased by 100%, will
be taken from the portion of the guaranteed Deposit kept for this
purpose. If the title corrections cannot be done without the
participation of the Seller and the later refuses or neglects to
bring his assistance to the Buyer within the allowed time (or
another deadline agreed to between parties), then the Buyer can
keep the portion of the guaranteed Deposit kept for this purpose
and he also will keep all his rights to article 7, if necessary,
and all other rights and recourses allowed by law.
4.4
Environmental verification
The Buyer will have until May 31, 2009, to proceed, at his own
expense, to the environmental evaluation of the property. In
the framework of this evaluation, the following provisions will be
applicable:
4.4.1 If the environmental evaluation
reveals that the property (i) does not require any corrective
measure or (ii) if the total environmental costs (including
environmental reports Phase 1 and 11) and the costs for corrective
measures resulting from the environmental evaluation as evaluated
by an environment expert that carried out the environmental
evaluation, are evaluated to 25 000 $ or less, then these costs
will be entirely assumed by the Buyer and in either cases, the
guaranteed Deposit and accrued interests will be handed over to the
Seller under the reserved provisions of paragraph 4.3 of the
presents.
4.4.2 If however, the total environmental
evaluation costs (including environmental reports Phase 1 and 11)
and costs for corrective measures resulting in the environmental
evaluation as evaluated by an environment expert that carried out
the environmental evaluation are superior to 25 000 $, then any
amount exceeding 25 000 $ will be assumed in equal parts by the
parties (being however understood that the portion the Seller must
assumed cannot exceed in any case 100 000 $) and a portion of the
guaranteed Deposit will be kept by the Consignee until corrective
measures are brought. The portion of the guaranteed Deposit
that will be kept by the Consignee will be equal to the cost that
the Seller will have to assume according to the above.
