Exhibit 10.2

2607043 ONTARIO INC.

and

RTK WP2 CANADA, ULC

 

 

ASSET PURCHASE AGREEMENT

Dated December 15, 2017

 

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT made as of the 15th day of December, 2017 between:

2607043 ONTARIO INC., a body corporate incorporated under the laws of Ontario
(the “Purchaser”)

- and -

RTK WP2 CANADA, ULC, a body corporate incorporated under the laws of the
Province of British Columbia (the “Vendor”)

WHEREAS:

 

A. all of the material assets and rights used in the conduct, operation or
maintenance of, or otherwise relating to, the Purchased Business (as defined
herein) are legally and beneficially owned by the Vendor or leased by the Vendor
under existing leases, all as more particularly set out in this Agreement; and

 

B. the Vendor wishes to sell, and the Purchaser wishes to purchase, the
Purchased Assets (as defined herein) and assume the Assumed Liabilities (as
defined herein) associated therewith, upon the terms and subject to the
conditions set out in this Agreement;

NOW THEREFORE, in consideration of the representations, warranties, covenants
and agreements herein and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), the Parties covenant and agree as
set forth herein.

ARTICLE 1

DEFINITIONS

 

1.1 Definitions

In this Agreement, unless the context otherwise requires:

 

  (a) “Adjusted Purchase Price” has the meaning ascribed thereto in
Section 2.6(c)(i);

 

  (b) “Affiliate” means, with respect to a specified Person, a Person that
controls, is controlled by or is under common control with the subject Person
and, for the purpose of this definition, control means the ability, directly or
indirectly, to direct the voting of fifty percent (50%) or more of the voting
interests of a Person;

 

  (c) “Agreement” means this agreement, including all Schedules to this
agreement, as amended or supplemented from time to time, and “hereby”, “hereof”,
“herein”, “hereunder”, “herewith”, “hereto” and similar terms refer to this
Agreement and not to any particular provision of this Agreement;

 

  (d) “Agrirecycle Liens” means the construction liens in favour of Agrirecycle,
Inc. registered on title to the Real Property under registration numbers
RD28679, RD28680;

 

  (e) “Assumed Contracts” has the meaning ascribed thereto in Section 2.1(e);

 

  (f) “Assumed Liabilities” has the meaning ascribed thereto in Section 2.2;

 

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  (g) “Books and Records” means, collectively, all books and records relating to
the Purchased Business or any of the Purchased Assets, including financial,
corporate, operation and sales books, employee files, records, books of account,
sales and purchase records, lists of present and former suppliers, customers and
any others having business dealings with the Purchased Business, clients, sales
leads, distributors, mailing lists, formulae, business reports, operating
materials, engineering standards and specifications, and all other documents,
files, records, correspondence (excluding correspondence with counsel or other
advisors and relating to the transactions contemplated herein), and other data
and information, financial or otherwise, including all data and information
stored on computer-related or other electronic media maintained with respect to
the Purchased Business or any of the Purchased Assets, but excluding corporate
minute books of the Vendor;

 

  (h) “Business Day” means a day, other than a Saturday, Sunday or statutory
holiday in the Province of Ontario, when banks are generally open for the
transaction of banking business in Toronto, Ontario;

 

  (i) “Claims” includes claims, demands, complaints, grievances, actions,
applications, suits, causes of action, Orders, charges, indictments,
prosecutions, information or other similar processes, assessments or
reassessments, judgments, Liabilities, expenses, costs, damages or Losses,
contingent or otherwise, whether liquidated or unliquidated, matured or
unmatured, disputed or undisputed, contractual, legal or equitable, including
loss of value, professional fees, including fees and disbursements of legal
counsel on a full indemnity basis, and all costs incurred in investigating or
pursuing any of the foregoing or any proceeding relating to any of the
foregoing;

 

  (j) “Closing” means the closing of the transactions contemplated herein;

 

  (k) “Closing Cash Amount” has the meaning ascribed thereto in
Section 2.5(a)(ii);

 

  (l) “Closing Date” means January 19, 2018, provided that the Parties may agree
to advance or extend the Closing Date at any time and from time to time by
mutual written consent;

 

  (m) “Closing Time” means 12:01 a.m. (Toronto time) on the Closing Date, or
such other time as may be agreed upon by the Parties in writing;

 

  (n) “Closing Working Capital” means the amount of the Working Capital as
determined as at the Closing Date but immediately prior to Closing in accordance
with this Agreement;

 

  (o) “Commodity Taxes” means all taxes levied on or measured by, or referred to
as transfer, land transfer, registration charges, gross receipt, sales,
provincial sales, use, documentary, recording, consumption, value-added,
turnover, excise, stamp, road, fuel or similar taxes (including, for greater
certainty, HST and the Ontario provincial and municipal land transfer tax),
Provincial Tax, all customs duties, countervail, anti-dumping and special import
measures and all import and export taxes and any security in respect thereof,
and any interest, penalties, additional taxes, additions to tax or other amounts
imposed with respect to the foregoing;

 

  (p)

“Contract” means each and every promissory note, contract, indenture, licence,
lease, deed, agreement, obligation, promise, undertaking, understanding, option,
instrument, arrangement, document, entitlement, engagement or any other binding
commitment,

 

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  whether written or oral, to which the Vendor is a party or by which the Vendor
is bound or under which the Vendor has, or will have, any right, benefit or
Liability, or any contingent right, benefit or Liability (in each case, whether
written or oral, express or implied) and in each case, relating exclusively to
the Purchased Business or any of the Purchased Assets;

 

  (q) “Credit Suisse” means Credit Suisse AG, Cayman Islands Branch, as
administrative agent for the benefit of certain lenders from time to time party
to the Credit Suisse Agreement;

 

  (r) “Credit Suisse Agreement” means that certain second amended and restated
term loan credit agreement dated as of April 9, 2014 between, among others,
Rentech Nitrogen Holdings, Inc. and Credit Suisse, providing secured credit
facilities to Rentech and its subsidiaries, with the aggregate principal amount
of approximately US$19.5 million outstanding as of the date of this Agreement;

 

  (s) “Credit Suisse Obligations” means the obligations of the Vendor with
respect to its guarantee of the amounts owing to Credit Suisse pursuant to the
Credit Suisse Agreement;

 

  (t) “Credit Suisse Registrations” means Ontario PPSA registration no. 20150206
1627 1590 9476 and British Columbia PPSA registration no. 429120I in favour of
of Credit Suisse securing the Credit Suisse Obligations;

 

  (u) “Current Assets” means the assets listed in Section 2.1(h), but excluding,
for certainty, the Excluded Assets;

 

  (v) “Current Liabilities” means the liabilities listed in Schedule 1.1(v);

 

  (w) “Direct Claim” has the meaning ascribed thereto in Section 7.4(f);

 

  (x) “Dispute Notice” has the meaning ascribed thereto in Section 2.6(b);

 

  (y) “Disputed Amounts” has the meaning ascribed thereto in Section 2.2(b);

 

  (z) “Disputed Matter” has the meaning ascribed thereto in Section 2.6(b);

 

  (aa) “Encumbrance” means any encumbrance, mortgage, pledge, assignment,
charge, lien, security interest or other third party interest and any agreement,
option, right or privilege (whether by Law, contract or otherwise) capable of
becoming any of the foregoing;

 

  (bb) “Environmental Approvals” means all permits, certificates, licences,
authorizations, consents, registrations, or approvals issued or required by
Governmental Authorities pursuant to Environmental Laws with respect to the
operation of the Purchased Business or related to any of the Purchased Assets;

 

  (cc)

“Environmental Laws” means all Laws relating to public health and safety, noise
control, pollution or the protection of the natural environment or to the use,
storage, generation, handling, manufacturing, processing, sale, treatment,
disposal, recycling, reuse, transportation, release (as such term is defined or
used under Environmental

 

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  Laws), threatened release or remediation of hazardous substances (as such term
is defined or used under Environmental Laws), and all authorizations issued
pursuant to such Laws;

 

  (dd) “Estimated Closing Statement” has the meaning ascribed thereto in
Section 2.5(b);

 

  (ee) “ETA” means the Excise Tax Act (Canada), as amended or superseded from
time to time;

 

  (ff) “Excluded Assets” means those assets listed in Schedule 1.1(ff);

 

  (gg) “Governmental Authorities” means any: (i) national, federal, provincial,
state, regional, municipal, local or other government, governmental or public
department, central bank, court, tribunal, arbitral body, commission, board,
bureau or agency, domestic or foreign; (ii) subdivision, agency, commission,
board or authority of any of the foregoing; or (iii) quasi-governmental or
private body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing;

 

  (hh) “HST” means all Taxes payable under Part IX of the ETA or under any
provincial legislation similar to the ETA, and any reference to a specific
provision of the ETA shall refer to any successor provision thereto of like or
similar effect;

 

  (ii) “Indemnified Party” has the meaning ascribed thereto in Section 7.4;

 

  (jj) “Indemnifying Party” has the meaning ascribed thereto in Section 7.4;

 

  (kk) “Indemnity Claim” has the meaning ascribed thereto in Section 7.4;

 

  (ll) “Independent Accountant” means an accounting firm independent of the
Parties and which shall be appointed by the mutual agreement of the Parties as
required by the terms and conditions of this Agreement. If the Parties are
unable to agree on the Independent Accountant within 10 days then the
Independent Accountant shall be Steven Cavar Professional Corporation;

 

  (mm) “Interim Period” has the meaning ascribed thereto in Section 4.1;

 

  (nn) “Inventory” has the meaning ascribed thereto in Section 2.1(h)(B), and
shall, for the purposes of Closing Working Capital as set out in the
Post-Closing Statement, be calculated as described in Schedule 1.1(nn);

 

  (oo) “Laws” means all applicable laws, by-laws, statutes, regulations, Orders,
ordinances, awards, codes, injunctions, judgments (including judicial decisions
under common law or equity) and requirements of any Governmental Authority in
each case having the force of law;

 

  (pp) “Leases” has the meaning ascribed thereto in Section 2.1(b);

 

  (qq) “Liability” means, with respect to any Person, any liability, debt, duty,
undertaking or obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued, disputed
or undisputed, liquidated or unliquidated, secured or unsecured, joint or
several, due or to become due, vested or unvested, executory, determined,
determinable or otherwise, and whether or not the same is required to be accrued
on the financial statements of such Person;

 

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  (rr) “Losses” means, in respect of a Person and in relation to a matter, all
losses, costs, debts, expenses and damages (including all penalties, fines and
interest thereon), contingent or otherwise liquidated or unliquidated which such
Person suffers, sustains, pays or incurs in connection with such matter, whether
or not a Claim has been made, an Order issued or a judgment obtained, and
includes Taxes (other than refundable Taxes), costs and disbursements of legal
counsel (on a full indemnity basis) and other experts and consultants and
reasonable costs arising from such matter;

 

  (ss) “Orders” means orders, injunctions, judgments, administrative complaints,
decrees, rulings, awards, assessments, directions, instructions, penalties or
sanctions issued, filed or imposed by any Governmental Authority or arbitrator
and includes remedial orders;

 

  (tt) “Ordinary Course of Business” means the ordinary course of business
consistent with prior custom and practice of the entity to whom such term
relates (including with respect to quantity, frequency, terms, values, risks and
obligations);

 

  (uu) “Parties” means the parties to this Agreement and their respective heirs,
executors, legal representatives, successors and permitted assigns and “Party”
means any one of them;

 

  (vv) “Permitted Encumbrances” means the Encumbrances listed in Schedule
1.1(vv) hereto;

 

  (ww) “Person” includes an individual, partnership, limited partnership, firm,
joint venture, venture capital fund, limited liability company, unlimited
liability company, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, Governmental
Authorities, agency or instrumentality, unincorporated organization or
association syndicate or other entity, whether or not having legal status;

 

  (xx) “Physical Inventory” has the meaning ascribed thereto in Schedule
1.1(nn);

 

  (yy) “Post-Closing Statement” has the meaning ascribed thereto in
Section 2.6(a);

 

  (zz) “Prepaid Expenses and Deposits” has the meaning ascribed thereto in
Section 2.1(h)(C);

 

  (aaa) “Provincial Tax” means provincial sales tax payable in respect of the
sale of the Purchased Assets by the Vendor to the Purchaser as provided in this
Agreement;

 

  (bbb) “Purchase Price” has the meaning ascribed to it in Section 2.4;

 

  (ccc) “Purchased Accounts Receivable” has the meaning ascribed thereto in
Section 2.1(h)(A);

 

  (ddd) “Purchased Assets” has the meaning ascribed thereto in Section 2.1;

 

  (eee) “Purchased Business” means the wood pellet production business conducted
by the Vendor, in Atikokan, Ontario;

 

  (fff) “Purchased Business Employees” has the meaning ascribed thereto in
Section 4.3(a);

 

  (ggg) “Purchaser’s Counsel” means Perras Mongenais or such other legal counsel
as may be designated by the Purchaser;

 

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  (hhh) “Real Property” means the lands and premises set forth in Schedule
2.1(a);

 

  (iii) “Realty Tax” means all taxes, levies, charges, local improvement rates
and assessments whatsoever charged against the Real Property or part thereof by
any Governmental Authority (other than Commodity Taxes);

 

  (jjj) “Regulatory Authorizations” means, collectively, all licences, permits,
registrations, certificates, consents, Orders and similar rights and privileges
in respect of, or required in connection with, the Purchased Assets and/or the
carrying on of the Purchased Business, including the Environmental Approvals;

 

  (kkk) “Rentech” means Rentech Inc.;

 

  (lll) “Representatives” means, in reference to a Party, its representatives,
agents, legal counsel, accountants, consultants and advisors;

 

  (mmm) “Required Approvals” means the material consents, approvals and
authorizations referred to in Schedule 1.1(mmm) hereto from a Governmental
Authority or other third party required to consummate the transactions
contemplated by this Agreement;

 

  (nnn) “Retained Liabilities” has the meaning ascribed thereto in Section 2.3;

 

  (ooo) “Security Amount” has the meaning ascribed thereto in Section 2.5(a)(i);

 

  (ppp) “Tax Act” means the Income Tax Act (Canada);

 

  (qqq) “Taxes” means, with respect to any Person, all income taxes (including
any tax on or based upon net income, gross income, income as specifically
defined, earnings, profits or selected items of income, earnings or profits) and
all Commodity Taxes, Realty Taxes, capital taxes, gross receipts taxes,
environmental taxes, sales taxes, use taxes, ad valorem taxes, value added
taxes, transfer taxes, franchise taxes, licence taxes, withholding taxes or
other withholding obligations, payroll taxes, employment taxes, Canada Pension
Plan premiums, other government pension plan premiums or contributions, Quebec
Pension Plan premiums, excise, severance, social security premiums, workplace,
safety and insurance premiums, employment insurance or compensation premiums,
occupation taxes, premium taxes, property taxes, provincial Crown royalties,
state taxes, windfall profits taxes, alternative or add-on minimum taxes, goods
and services tax, harmonized sales tax, customs duties, fuel taxes, propane
taxes, liquefied gas taxes, tobacco taxes or other taxes of any kind whatsoever,
together with any interest and any penalties or additional amounts imposed by
any taxing authority (domestic or foreign) on any Person or for which such
Person is responsible, and any interest, penalties, additional taxes, additions
to tax or other amounts imposed with respect to the foregoing;

 

  (rrr) “Tax Returns” includes all returns, reports, notices, forms,
declarations, elections, filings, information returns and statements (including
any amendments, schedules, attachments, supplements, appendices and exhibits
thereto) required to be filed with any Governmental Authority in respect of
Taxes, whether in tangible, electronic or other form;

 

  (sss) “Third Party Liability” has the meaning ascribed thereto in
Section 7.4(b);

 

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  (ttt) “Transferred Information” means the personal information (namely,
information about an identifiable individual other than their business contact
information when used or disclosed for the purpose of contacting such individual
in that individual’s capacity as a representative of an organization and for no
other purpose) to be disclosed or conveyed to the Purchaser or any of its
Representatives by or on behalf of any of the Vendor as a result of or in
conjunction with the transactions contemplated herein, and includes all such
personal information disclosed to the Purchaser prior to the execution of this
Agreement;

 

  (uuu) “Transition Agreement” means an agreement respecting transition services
between the Purchaser and Rentech substantially in the form attached hereto as
Schedule 1.1(uuu);

 

  (vvv) “Valuation Guidelines” has the meaning ascribed thereto in Schedule
1.1(dd);

 

  (www) “Vendor’s Counsel” means Norton Rose Fulbright Canada LLP or such other
legal counsel as may be designated by the Vendor;

 

  (xxx) “Vendor’s Proposed Calculation” has the meaning ascribed thereto in
Section 2.6(a); and

 

  (yyy) “Working Capital” means, with respect to the Purchased Business, the
Current Assets less the Current Liabilities of the Purchased Business, as
determined in accordance with Section 2.6(d).

 

1.2 Certain Rules of Interpretation

In this Agreement and the Schedules:

 

  (a) Currency—unless otherwise specified, all references to money amounts are
to Canadian currency;

 

  (b) Headings—the descriptive headings of Articles and Sections are inserted
solely for convenience of reference and are not intended as complete or accurate
descriptions of the content of such Articles or Sections and shall not affect
the construction or interpretation of this Agreement;

 

  (c) Singular, etc.—the use of words in the singular or plural, or with a
particular gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such Person or Persons or circumstances as the
context otherwise permits;

 

  (d) Inclusive Terminology—whenever used in this Agreement, the words
“includes” and “including” and similar terms of inclusion will not, unless
expressly modified by the words “only” or “solely”, be construed as terms of
limitation, but rather will mean “includes but is not limited to” and “including
but not limited to”, so that references to included matters will be regarded as
illustrative without being either characterizing or exhaustive;

 

  (e)

Consent—whenever a provision of this Agreement requires an approval or consent
by a Party to this Agreement and notification of such approval or consent is not
delivered within the applicable time limit, then, unless otherwise specified,
the Party whose consent

 

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  or approval is required shall be conclusively deemed to have withheld its
approval or consent; and

 

  (f) Calculation of Time—other than in respect of any time period commencing on
the Closing Date and unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done shall be
calculated by excluding the day on which the period commences and including the
day on which the period ends and by extending the period to the next Business
Day following if the last day of the period is not a Business Day.

 

1.3 Knowledge

Where any representation or warranty contained in this Agreement is expressly
qualified by reference to knowledge of a Party, it refers to, in the case of the
Vendor, the actual knowledge of Paul Summers.

 

1.4 Statute References

A reference in this Agreement to a statute shall be a reference to the statute
and the regulations promulgated thereunder, as amended or superseded from time
to time, either before or after the date hereof, unless otherwise stated or the
context otherwise requires.

 

1.5 Schedules

The schedules to this Agreement, as listed below, are an integral part of this
Agreement:

 

Schedule

  

Description

Schedule 1.1(v)

  

Current Liabilities

Schedule 1.1(ff)

  

Excluded Assets

Schedule 1.1(nn)

  

Inventory

Schedule 1.1(vv)

  

Permitted Encumbrances

Schedule 1.1(mmm)

  

Required Approvals

Schedule 1.1(uuu)

  

Form of Transition Agreement

Schedule 2.1(a)

  

Real Property

Schedule 2.1(b)

  

Leased Property

Schedule 2.1(c)

  

Machinery and Equipment

Schedule 2.6(d)

  

Working Capital

Schedule 2.1(e)

  

Assumed Contracts

Schedule 2.7

  

Purchase Price Allocation

Schedule 3.1(g)

  

Assignments and/or Licences

Schedule 4.3(a)

  

Purchased Business Employees

 

1.6 Conflicts

Where any provision of any Schedule to this Agreement conflicts or is at
variance with any provision in the body of this Agreement, the provision in the
body shall prevail.

 

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ARTICLE 2

PURCHASE AND SALE

 

2.1 Purchase and Sale

On the terms and subject to fulfillment of the conditions set out herein, the
Vendor hereby agrees to sell, assign, transfer and convey to the Purchaser and
the Purchaser agrees to purchase from the Vendor on the Closing Date effective
as at the Closing Time, all of the right, title and interest of the Vendor in
and to all of the property, assets and rights related to the Purchased Business
(collectively, the “Purchased Assets”), which shall include the following:

 

  (a) Real Property – the Real Property and all plant, buildings, structures,
improvements and fixtures (including fixed machinery and fixed equipment)
located thereon or forming part thereof, including all plants, buildings, card
locks and bulk fuel storage facilities, structures, erections, improvements,
appurtenances, tanks, lines, dispensers, canopies and fixtures (including fixed
machinery and fixed equipment) situate thereon, therein, thereunder or forming
part thereof;

 

  (b) Leases – all leases or agreements in the nature of a lease and any
interest therein, to which the Vendor is a party, relating to the Purchased
Business, except to the extent any of the foregoing are or relate to Excluded
Assets, all as more particularly described in Schedule 2.1(b) hereto (the
“Leases”);

 

  (c) Machinery and Equipment – all machinery, equipment (including computer
equipment) tools, and other miscellaneous items used in the conduct, operation
or maintenance of or otherwise related to, the Purchased Business, including as
set out in Schedule 2.1(c);

 

  (d) Other Tangible Assets – all other tangible assets, in each case, used in
the conduct, operation or maintenance of, or otherwise related to, the Purchased
Business (other than Inventory), whether located in or on the Real Property or
elsewhere;

 

  (e) Assumed Contracts – all of the Contracts to be assigned to the Purchaser
and described in Schedule 2.1(e) (the “Assumed Contracts”);

 

  (f) Warranty Rights and Maintenance Contracts – the full benefit of all
warranties and warranty rights (express and implied) that exist as of the
Closing Time provided by or against manufacturers, sellers or lessors of any of
the Purchased Assets, and all maintenance contracts that exist as of the Closing
Time in respect of any Purchased Assets, to the extent the same are transferable
to the Purchaser;

 

  (g) Phone Numbers, Customer Lists, etc. – the use of phone numbers (including
cellular phone numbers) and facsimile numbers, lists of present and former
suppliers, customers, clients, sales leads, distributors and others having
business dealings in respect of the Purchased Business and mailing lists used in
the conduct, operation or maintenance of, or otherwise related to, the Purchased
Business;

 

  (h) Current Assets – all the Current Assets, consisting of the following:

 

  (A)

Purchased Accounts Receivable – all accounts receivable recorded as being
receivable in the Books and Records, including those current and past-due
accounts receivables (net of a reasonable allowance for bad

 

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  debts which shall be equal to the greater of (i) a reasonable allowance for
bad debts as otherwise determined consistent with historical accounting
practices of the Vendor and (ii) an amount equal to the aggregate of all
accounts receivable aged 90 days or more at the Closing Date) comprised of
amounts due and payable to the Vendor in respect of the Purchased Business as at
the Closing Date: (x) under the Assumed Contracts; and (y) pursuant to the
operation of the Purchased Business, generated up until the Closing Date
(collectively, the “Purchased Accounts Receivable”);

 

  (B) Inventories – all items, as determined as of the Closing Date, directly or
indirectly, for sale, licence, rental, lease or other distribution in the
Ordinary Course of Business, or that are being produced for sale, or that are to
be consumed, directly or indirectly, in the production of goods or services to
be available for sale, of every kind and nature and wheresoever situate
(including items held by or consigned to third parties, located offsite or on
the applicable dealer site) relating to the Purchased Business, including all
packaging materials, operating supplies, spare parts and replacement parts in
new and unused condition, work in progress and finished goods (collectively, the
“Inventory”); and

 

  (C) Prepaid Expenses and Deposits – all prepaid expenses and deposits related
to the Purchased Business, including workers’ compensation prepayments, prepaid
insurance and property Taxes, security deposits and constructions deposits
(collectively, the “Prepaid Expenses and Deposits”);

 

  (i) Regulatory Authorizations – all Regulatory Authorizations, to the extent
the same are assignable or transferable;

 

  (j) Books and Records – all the Books and Records; and

 

  (k) Insurance Benefits – any benefits payable to the Vendor under all
insurance policies relating exclusively to the Purchased Business or the
Purchased Assets.

Notwithstanding anything to the contrary in this Agreement, the Purchased Assets
shall not include the Excluded Assets.

 

2.2 Assumed Liabilities

Subject to Closing, at the Closing Time, the Purchaser will assume and,
subsequent thereto, will pay, satisfy, discharge, perform and fulfill all of the
following obligations and liabilities (collectively, the “Assumed Liabilities”):

 

  (a) all of the obligations and liabilities of the Vendor under the Assumed
Contracts, Leases and the Permitted Encumbrances, excluding any obligations and
liabilities of the Vendor relating to the Agrirecycle Liens and Credit Suisse
Registrations;

 

  (b)

all obligations and liabilities of the Vendor with respect to the operations of
the Purchased Business and the ownership or rental of the Purchased Assets,
excluding the Retained Liabilities and including all accounts payable, accrued
liabilities and customer

 

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  deposits payable associated with the Purchased Business or the ownership or
rental of the Purchased Assets (including the Current Liabilities);

 

  (c) all of the obligations and liabilities accruing prior to, on and after the
Closing Time or otherwise resulting from any action or inaction taken by the
Purchaser on or after the Closing Time in respect of any and all of the
Purchased Business Employees who have accepted the Purchaser’s offer of
employment;

 

  (d) all of the obligations and liabilities with respect to amounts owing to
any Purchased Business Employees, including for vacation time, wages and other
compensation, and for any Losses arising out of Claims by Purchased Business
Employees relating to the period on or after the Closing Time in respect of any
and all of the Purchased Business Employees who have accepted the Purchaser’s
offer of employment;

 

  (e) any and all other obligations and liabilities expressly assumed by the
Purchaser under this Agreement, and

for greater certainty, the Vendor will not retain or continue to be responsible
for and will not have any obligation to pay, satisfy, discharge, perform or
fulfill any of the Assumed Liabilities.

 

2.3 Retained Liabilities

Except to the extent included in the Assumed Liabilities, the Purchaser will not
assume and will have no obligation to pay, satisfy, discharge, perform or fulfil
the following obligations and liabilities of the Vendor both before and after
the Closing Time (collectively, the “Retained Liabilities”):

 

  (a) any Commodity Taxes payable in connection with the Purchased Business for
the period prior to Closing;

 

  (b) any and all obligations due or that may become due to 2196957 Ontario
Ltd., Great North Bio Energy Inc. and Automation Now Inc.;

 

  (c) any and all obligations due to Agrirecycle, Inc.;

 

  (d) any and all obligations due to Credit Suisse;

 

  (e) any and all obligations due to Canadian National Railway;

 

  (f) any and all obligations due to Northern Ontario Heritage Foundation
Corporation;

 

  (g) all of the obligations and liabilities with respect to amounts owing to
any Purchased Business Employees, including for vacation time, wages and other
compensation, and for any Losses arising out of Claims by Purchased Business
Employees relating to the period prior to the Closing Time;

 

  (h) all liabilities of the Vendor whether or not incurred in connection with
the Purchased Business, that are due to, or owing to, a party not dealing with
the Vendor on an arm’s length basis (within the meaning of the Tax Act) or not
specifically listed as Assumed Liabilities in Section 2.2; and

 

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  (i) any and all other obligations and liabilities expressly assumed by the
Vendor under this Agreement.

 

2.4 Purchase Price

The consideration payable by the Purchaser for the sale of the Purchased Assets
by the Vendor to the Purchaser shall be the aggregate amount of $3,200,000.00,
increased (or decreased) by an amount equal to the Closing Working Capital
(collectively, the “Purchase Price”). The Purchase Price shall be payable by the
Purchaser as set forth in Section 2.5 and Section 2.6(c).

 

2.5 Closing Date Payments

 

  (a) On Closing, the Purchaser shall:

 

  (i) pay to the Vendor’s Counsel in trust an amount as directed by the Vendor
sufficient to vacate the Agrirecycle Liens (the “Security Amount”) by payment of
the Security Amount into court for such purpose, estimated to be approximately
$1,044,288.75;

 

  (ii) pay to the Vendor or as directed by the Vendor an amount equal to
$3,200,000.00, increased (or decreased) by an amount equal to the Closing
Working Capital set out in the Estimated Closing Statement (the “Closing Cash
Amount”), less the Security Amount paid pursuant to Section 2.5(a)(i); and

 

  (iii) assume the Assumed Liabilities in accordance with Section 2.2.

 

  (b) The Purchaser and the Vendor acknowledge that it is not possible to
conclusively determine the Closing Working Capital until the Post-Closing
Statement is finalized in accordance with Section 2.6. Accordingly, the
Purchaser and the Vendor agree that, not less than three Business Days before
the Closing Date, the Vendor shall deliver to the Purchaser a good faith
estimate (the “Estimated Closing Statement”) of Closing Working Capital and the
resulting calculation of the Closing Cash Amount.

 

2.6 Post-Closing Working Capital Adjustment

 

  (a) No later than 45 Business Days following the Closing Date, the Vendor
shall prepare and deliver to the Purchaser a closing statement (the
“Post-Closing Statement”) setting forth, in reasonable detail, the Vendor’s
calculation (the “Vendor’s Proposed Calculation”) of the Closing Working Capital
and the revised Purchase Price based thereon. The Vendor shall provide the
Purchaser and its authorized representatives with reasonable access and
assistance during normal business hours to the books and records of the Vendor
to verify the accuracy of Vendor’s Proposed Calculation (including providing
reasonable access to any working papers in respect of Vendor’s Proposed
Calculation), provided, however, that such access shall not unreasonably disrupt
the operations of the Vendor.

 

  (b)

The Purchaser may object to any matter relating to the Post-Closing Statement or
the Vendor’s Proposed Calculation by written notice of objection (the “Dispute
Notice”) delivered to Vendor within 10 Business Days after the Purchaser’s
receipt of the Post-Closing Statement. In the event the Purchaser elects not to
deliver a Dispute Notice to the Vendor within such 10 Business Day period, the
Post-Closing Statement will be conclusive and binding on the Purchaser and the
Vendor. The Dispute Notice, if any,

 

12

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  shall set forth, in reasonable detail, the matter in dispute and the basis for
the dispute (the “Disputed Matter”) and, if related to a monetary amount, the
amount of the Vendor’s Proposed Calculations in dispute (the “Disputed
Amounts”). If the Purchaser delivers a Dispute Notice within the 10 Business Day
period referred to in this Section 2.6(b), then: (i) any amount of Vendor’s
Proposed Calculation that is not a Disputed Amount shall be treated as final and
binding; and (ii) any Disputed Matter or Disputed Amount shall be resolved as
follows:

 

  (i) the Purchaser and the Vendor shall use commercially reasonable efforts to
resolve the Disputed Matters and the Disputed Amounts as soon as practicable. If
the Purchaser and the Vendor do not agree on the determination of the Disputed
Matters and the calculations of all of the Disputed Amounts within 30 Business
Days of a Dispute Notice being received, the dispute shall be referred to the
Independent Accountant. The Independent Accountant shall, as promptly as
practicable, make a determination in respect of the Disputed Matters or Disputed
Amounts subject to the following:

 

  (A) The Independent Accountant shall conduct a review and verification of the
Disputed Matters and the Disputed Amounts based solely on materials presented by
the Purchaser and the Vendor, and not by independent review (provided, however,
that all calculations shall be performed in a manner consistent with past
practices of the Vendor), and shall select either the Purchaser’s determination
of the Disputed Matters and the calculations of the Disputed Amounts as set
forth in the Dispute Notice or the Vendor’s determination of the Disputed
Matters and the Vendor’s Proposed Calculation of the Disputed Amounts as set
forth in Post-Closing Statement or an amount that is between the two proposed
calculations.

 

  (B) Each of the Purchaser and the Vendor shall use their commercially
reasonable efforts to cause the Independent Accountant to render a decision in
accordance with this Section 2.6(b)(i), along with a statement of reasons
therefor, within 45 days of the submission of the Disputed Matters and the
Disputed Amounts to the Independent Accountant or a reasonable time thereafter.
The decision of the Independent Accountant shall be final and binding upon the
Parties and non-appealable, and each such Party shall be entitled to obtain a
judgment entered by a court having competent jurisdiction thereover enforcing
such decision.

 

  (C)

In the event the Parties submit any Disputed Matters or Disputed Amounts to the
Independent Accountant for resolution, and the Independent Accountant awards a
decision in favour of one Party, the other Party shall be responsible to pay the
fees and costs of the Independent Accountant. If the Independent Accountant
determines that the Disputed Matters or the Disputed Amount is between the
Purchaser’s calculation of the Disputed Matters or the Disputed Amounts as set
forth in the Dispute Notice and the Vendor’s Proposed Calculation of the
Disputed Amounts as set forth in Post-Closing Statement, the fees and costs of
the Independent Accountant shall be allocated between the Parties based upon the
percentage which the portion of the Disputed Amount not awarded to each Party
bears to the amount actually

 

13

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  contested by such Party. Regardless of the determination of the Independent
Accountant, each Party shall be responsible for their own costs and expenses
incurred under this Section 2.6(b)(i) (other than the fees and costs of the
Independent Accountant).

 

  (c) Once the Closing Working Capital has been finally determined in accordance
with this Section 2.6, then:

 

  (i) if the Closing Cash Amount is greater than the Purchase Price, as finally
adjusted in accordance with the provisions hereof (the “Adjusted Purchase
Price”), then the Vendor shall promptly pay the amount of the difference between
the Adjusted Purchase Price and the Closing Cash Amount to the Purchaser; and

 

  (ii) if the Adjusted Purchase Price is greater than the Closing Cash Amount,
then the Purchaser shall promptly pay the amount of the difference between the
Adjusted Purchase Price and the Closing Cash Amount to the Vendor.

 

  (d) Schedule 2.6(d) attached hereto sets forth the basis on which the Working
Capital is to be calculated with respect to the Purchased Business, together
with a sample calculation thereof. The Parties acknowledge and agree that the
Closing Working Capital shall be calculated on the same basis, and using the
same principles set forth in, Schedule 2.6(d) and the sample calculation
attached thereto.

 

2.7 Allocation of Purchase Price

The Purchase Price shall be allocated as set forth in Schedule 2.7.

 

2.8 Tax Matters

 

  (a) The Vendor and the Purchaser shall file their respective Tax Returns based
upon and in accordance with the allocations of the Purchase Price set out in
Section 2.7 and will not make any inconsistent statements or take any
inconsistent positions on any Tax Returns, in any refund claims or during the
course of any audits by any taxing authorities, except as required by Law. If
and to the extent the Purchase Price is adjusted post-Closing as at the Closing
Date in accordance with this Article 2, then the allocation of the Purchase
Price among the Purchased Assets shall also be adjusted such that the categories
of Purchased Assets in Schedule 2.7 with which such adjustments, if any, are
most closely associated will be adjusted by a corresponding amount, and to the
extent that no such association can be determined, the net amount of any such
adjustment will be applied to goodwill. If such allocation is disputed by any
Governmental Authority, the Vendor or the Purchaser, as the case may be,
receiving notice of such dispute will promptly notify the Vendor or the
Purchaser, as the case may be, and the Vendor and the Purchaser will use
commercially reasonable efforts to sustain the final allocation. The Vendor and
the Purchaser will share information and cooperate to the extent reasonably
necessary to permit the transactions contemplated by this Agreement to be
properly, timely and consistently reported.

 

  (b)

The Purchaser shall pay (or cause to be paid) all Commodity Taxes applicable to,
or resulting from the transactions contemplated by, this Agreement and any
filing, registration, recording or transfer fees payable in connection with the
instruments of transfer provided for in this Agreement. In respect of the
purchase and sale of the

 

14

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  Purchased Assets under this Agreement, each Party shall pay direct to the
appropriate Governmental Authority all Commodity Taxes, registration charges and
transfer fees payable by it and, upon the reasonable request of a Party, the
requested Party shall furnish proof of such payment except that the Purchaser
shall be liable for and shall pay all applicable Commodity Taxes required to be
collected by the Vendor and the Vendor shall collect and remit any such
collected Commodity Taxes as required by applicable Laws. The Purchaser shall
also provide Vendor with a purchase exemption certificate or its equivalent to
support any reasonable exemption claimed in respect of the Purchased Assets.

 

  (c) The Purchaser will not be responsible for the payment of any Taxes to any
relevant Governmental Authority relating to the operation and/or the ownership
of the Purchased Assets which arise on or before, or are related to a period of
time on or before, the Closing Time. Liability for Realty Taxes shall be
apportioned at the Closing between the Vendor and the Purchaser based upon the
amounts set forth in the current tax bills therefor and the number of days in
the taxable period prior to (and including) the Closing Date and in the taxable
period following the Closing Date.

 

  (d) The Purchaser is registered for GST/HST purposes under Part IX of the ETA
and its GST/HST number is 784057283 RT0001.

 

  (e) The Vendor is registered for GST/HST purposes under Part IX of the ETA and
its GST/HST number is 826461139 RT0001.

 

  (f) The Vendor agrees to jointly elect with the Purchaser, on the Closing
Date, under subsection 167(1) of the ETA, and under any similar provision of any
applicable provincial legislation, in the form prescribed for the purposes of
that provision, in respect of the sale and transfer of the Purchased Assets by
the Vendor hereunder, and the Purchaser shall file such elections with the
Canada Revenue Agency within the time periods prescribed under the ETA, and
provide the Vendor within 20 days of receipt with a photocopy of a written
acknowledgement by the Canada Revenue Agency (and by the provincial taxing
authority, where applicable) of the receipt of such elections. Notwithstanding
anything to the contrary in this Agreement, the Purchaser shall indemnify and
hold the Vendor harmless in respect of any Commodity Taxes, penalties, interest
and other amounts which may be assessed against the Vendor as a result of the
transactions under this Agreement including as a result of the Purchased Assets
not being eligible for such elections or as a result of the Purchaser’s failure
to file the elections within the prescribed time.

 

  (g) The Purchaser and the Vendor agree to make and file, in the manner and
within the time prescribed in the Tax Act:

 

  (i) a joint election to have the rules in section 22 of the Tax Act, and any
equivalent or corresponding provision under applicable provincial or territorial
tax legislation, apply in respect of the Purchased Accounts Receivable, and
shall designate therein that portion of the Purchase Price allocated to the
Purchased Accounts Receivable as the consideration paid by the Purchaser to the
Vendor; and

 

  (ii)

a joint election to have the rules in subsection 20(24) of the Tax Act, and any
equivalent or corresponding provision under applicable provincial or territorial

 

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  tax legislation, apply to the obligations of the Vendor in respect of
undertakings which arise from the operation of the Purchased Business and to
which paragraph 12(1)(a) of the Tax Act applies. The Purchaser and the Vendor
acknowledge that the Vendor are transferring assets to the Purchaser which have
a value equal to the elected amount as consideration for the assumption by the
Purchaser of such obligations of the Vendor.

 

2.9 Tender

Any payment of money made pursuant to this Agreement or any document delivered
pursuant hereto will be made by wire transfer of immediately available funds to
the account specified by the Party entitled to receive such payment or by direct
deposit of a certified cheque or bank draft.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Vendor

The Vendor hereby represents and warrants to the Purchaser that:

 

  (a) the Vendor is incorporated, organized and validly existing under the laws
of its jurisdiction of incorporation, and has the corporate power and capacity
to conduct its business in the manner currently conducted by it;

 

  (b) the Vendor has all requisite power and authority to enter into this
Agreement and all documents to be delivered by it pursuant hereto and to perform
its obligations hereunder and thereunder;

 

  (c) the Vendor has not committed an act of bankruptcy, proposed a compromise
or arrangement to its creditors generally, had any petition for a receiving
order in bankruptcy filed against it, taken any proceeding with respect to a
compromise or arrangement, taken any proceeding to have itself declared bankrupt
or wound-up, taken any proceeding to have a receiver appointed over any part of
its assets, had any encumbrancer take possession of any of its property, or had
any execution or distress become enforceable or become levied upon any of its
property;

 

  (d) this Agreement has been duly authorized, executed and delivered on behalf
of the Vendor and constitutes a legal, valid and binding obligation of it,
enforceable against the Vendor in accordance with its terms, subject to the
usual exceptions as to creditors’ rights and the availability of equitable
remedies and, at the Closing Time, all documents required hereunder to be
executed and delivered by the Vendor will have been duly authorized, executed
and delivered by it, and constitute legal, valid and binding obligations of the
Vendor, enforceable against the Vendor in accordance with their respective
terms, subject to the usual exceptions as to creditors’ rights and the
availability of equitable remedies;

 

  (e) the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto, the performance of the terms hereof and thereof and
the consummation of the transactions contemplated herein and therein do not and
will not:

 

  (i) result in the breach or violation of, conflict with or constitute a
default under, any term or provision of the articles, by-laws or governing
documents of the Vendor;

 

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  (ii) subject to receipt of the Required Approvals (and receipt of any consent
to the assignment of an Assumed Contract that does not constitute a Required
Approval), conflict with, result in a material breach or violation of,
constitute a material default under, accelerate or permit the acceleration of
the performance required by, or result in a right of termination of, any Assumed
Contract, instrument, licence, permit or authority to which the Vendor is a
party or by which the Vendor is bound or, to the knowledge of the Vendor, to
which any of the Purchased Assets are subject or result in the creation of any
Encumbrance upon any of the Purchased Assets or give others any material
interest or right, including any right of purchase, termination, cancellation or
acceleration under any such agreement, instrument, licence, permit or authority;

 

  (iii) violate any provision of law or administrative regulation or any
judicial or administrative order, award, judgment, ruling, injunction,
determination or decree applicable to the Vendor or, to the knowledge of the
Vendor, any of the Purchased Assets; or

 

  (iv) to the knowledge of the Vendor, cause the suspension or revocation of any
authorization, consent, approval or licence currently in effect in connection
with the Purchased Business;

 

  (f) the Vendor is not required to give any notice to, make any filing with, or
obtain any waiver, consent, approval or authorization of, any Governmental
Authority or other third party in order to consummate the transactions
contemplated by this Agreement save and except for:

 

  (i) notices, filings, waivers, consents, approvals or authorizations that if
not made or obtained, would not: (A) adversely affect its ability to consummate
the transactions contemplated by this Agreement on the terms and conditions set
forth herein; or (B) have a material adverse effect on the Purchased Business;
or

 

  (ii) notices, filings, waivers, consents, approvals or authorizations that
have been previously obtained and are currently in force; or

 

  (iii) the Required Approvals;

 

  (g) the Vendor owns and has the exclusive legal and beneficial right, title
and interest in and to all of the Purchased Assets (other than the personal
property (including machinery, equipment, tools and vehicles) leased by the
Vendor pursuant to the Assumed Contracts, as applicable), and at the Closing
Time the Purchased Assets will be free and clear of all Encumbrances other than
Permitted Encumbrances;

 

  (h) except for the Assumed Contracts and Contracts relating to the Excluded
Assets, the Vendor is not a party to or bound by any material Contract relating
to the Purchased Business or Purchased Assets, and has performed all of the
material obligations required to be performed by it and is entitled to all
benefits under, and is not in default or alleged to be in default in respect of,
any Assumed Contract; all such Assumed Contracts are in full force and effect,
and no event, condition or occurrence exists which, after notice or lapse of
time or both, would constitute a default under any of the foregoing. Vendor has
provided to Purchaser a true and complete copy of each of the Assumed Contracts
and all amendments thereto;

 

17

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  (i) the Purchased Assets are insured against loss or damage by all insurable
hazards or risks on a replacement cost basis and such insurance coverage will be
continued in full force and effect until and including the Closing Time. Vendor
is not in default with respect to any of the provisions contained in any such
insurance policy and has not failed to give any notice or present any claim
under any such insurance policy in a due and timely fashion; and

 

  (j) the Vendor is not a non-resident of Canada for the purposes of the Tax
Act.

The Vendor hereby acknowledges that the Purchaser is relying on the foregoing
representations and warranties in connection with the execution and delivery of
this Agreement and the purchase of the Purchased Assets.

 

3.2 Representations and Warranties of Purchaser

The Purchaser represents and warrants to the Vendor that:

 

  (a) the Purchaser is incorporated, organized and validly existing under the
laws of its jurisdiction of incorporation and has the corporate power and
capacity to own or lease its properties and assets and to carry on its business
as presently conducted by it;

 

  (b) the Purchaser has all requisite power and authority to enter into this
Agreement and all documents to be delivered pursuant hereto and to perform its
obligations hereunder and thereunder;

 

  (c) this Agreement has been duly authorized, executed and delivered on behalf
of the Purchaser and constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject to the usual exceptions as to creditors’ rights and the availability of
equitable remedies and, at the Closing Time, all documents required hereunder to
be executed and delivered by the Purchaser will have been duly authorized,
executed and delivered by the Purchaser, and constitute legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their respective terms, subject to the usual exceptions as to the
creditors’ rights and the availability of equitable remedies;

 

  (d) the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto, the performance of the terms hereof and thereof and
the consummation of the transactions contemplated herein and therein do not and
will not:

 

  (i) result in the breach or violation of, or constitute a default under, any
term or provision of the articles, by-laws or governing documents of the
Purchaser; or

 

  (ii) violate any provision of law or administrative regulation or any judicial
or administrative order, award, judgment or decree applicable to the Purchaser
or any of the assets or properties of the Purchaser;

 

  (e) the Purchaser understands that certain non-transferable Regulatory
Authorizations included in the Excluded Assets may be required for the continued
operation of the Purchased Business following Closing, and that Vendor makes no
representations to the Purchaser with respect to the ability of the Purchaser to
obtain such Regulatory Authorizations promptly following the date of this
Agreement or at all; and

 

18

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  (f) the Purchaser is not a “non-Canadian” within the meaning of the Investment
Canada Act (Canada).

The Purchaser hereby acknowledges that the Vendor is relying on the foregoing
representations and warranties in connection with the execution and delivery of
this Agreement and the sale of the Purchased Assets.

ARTICLE 4

COVENANTS

 

4.1 Covenants of the Vendor

Vendor covenants and agrees with Purchaser, that from the date hereof until the
Closing Date or termination of this Agreement (the “Interim Period”), except
with the prior written consent of the Purchaser, not to be unreasonably
withheld, and except as otherwise expressly permitted by the Purchaser in
writing or as specifically contemplated by this Agreement, the Vendor shall use
its commercially reasonable efforts to:

 

  (a) conduct the Purchased Business in the Ordinary Course of Business, except
where any non-compliance would not individually, or in the aggregate, materially
and adversely affect the Purchased Business;

 

  (b) maintain levels of Inventory relating to the Purchased Business consistent
with past practice in order to continue carrying on the Purchased Business in
the Ordinary Course of Business;

 

  (c) not do any of the following other than pursuant to transactions
contemplated herein or pursuant to commitments entered into prior to the date of
this Agreement and disclosed to the Purchaser in writing: (i) transfer, assign,
sell or otherwise dispose of any of the Purchased Assets, except in the Ordinary
Course of Business; (ii) cancel any debts or entitlements in respect of the
Purchased Business or the Purchased Assets, except in the Ordinary Course of
Business; (iii) terminate, waive, release or cancel any right of material value
to the Purchased Assets or the Purchased Business;

 

  (d) not terminate the employment of any Purchased Business Employee other than
for just cause as determined by the Vendor acting reasonably;

 

  (e) not commit to any capital expenditures which exceed, individually or in
the aggregate, $25,000.00;

 

  (f) not increase or promise to increase, in any manner, the compensation or
benefits of any Purchased Business Employee other than in the Ordinary Course of
Business;

 

  (g) preserve the goodwill of the Purchased Business and the relationships with
suppliers, customers, clients, sales leads, distributors, dealers, licensees and
others having past or present business dealings with the Vendor in respect of
the Purchased Business, to keep available the services of the Purchased Business
Employees, and to maintain in full force and effect all of the Assumed Contracts
and Regulatory Authorizations relating to the Purchased Business and the
Purchased Assets;

 

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  (h) subject to Section 4.7, maintain all of the Purchased Assets in the
Ordinary Course of Business;

 

  (i) perform all material obligations falling due during the Interim Period
under the Assumed Contracts and Regulatory Authorizations;

 

  (j) not enter into any Contract which will become an Assumed Contract without
the written consent of the Purchaser, which consent shall not be unreasonably
withheld;

 

  (k) not create or permit to be created any Encumbrance on any of the Purchased
Assets other than Permitted Encumbrances;

 

  (l) keep in full force and effect, and in good standing, all of the current
insurance policies of the Vendor with respect to the Purchased Business and the
Purchased Assets;

 

  (m) collect and manage accounts receivable and pay and manage accounts payable
in the Ordinary Course of Business and consistent with past practice;

 

  (n) not consent to or otherwise allow any material amendments or any other
material modifications to any of the Assumed Contracts;

 

  (o) promptly advise the Purchaser in writing of any material change in a
material representation or warranty; and

 

  (p) provide the Purchaser with reasonable access to all information and,
subject to any of its obligations under the Assumed Contracts, the Real
Property, to enable the Purchaser to familiarize itself with the Purchased
Business and facilitate the orderly transition of the Purchased Business to the
Purchaser, provided that the Purchaser covenants and agrees to indemnify and
save harmless the Vendor from any Losses that it may incur, whether with respect
to persons or property, as a result of such access to the Real Property by the
Purchaser.

 

4.2 Mutual Covenants

From the date hereof until the Closing Date, each Party hereto will use all
reasonable commercial efforts and proceed diligently, honestly and in good faith
to satisfy (or cause the satisfaction of) the conditions precedent to its
obligations hereunder and to take, or cause to be taken, all other action and to
do, or cause to be done, all other things necessary, proper or advisable under
applicable Laws to complete the transactions contemplated by this Agreement,
including using its reasonable commercial efforts to:

 

  (a) fulfill all conditions set forth in Sections 5.1 and 5.2 hereof, as
applicable, and perform all its obligations set forth in this Agreement;

 

  (b) obtain the Required Approvals; and

 

  (c) cooperate with the other Party in connection with the performance by the
other Party of its obligations hereunder.

 

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4.3 Offer of Employment

 

  (a) The Purchaser shall, within ten (10) Business Days prior to the Closing
Date (or such other date as mutually agreed by the Parties), offer to employ all
of the Purchased Business Employees listed in Schedule 4.3(a) (the “Purchased
Business Employees”), in writing and on terms and conditions of employment
substantially similar in the aggregate to the terms and conditions relating to
their employment as described in Schedule 4.3(a) and conditional on the
occurrence of Closing.

 

  (b) The Vendor shall not attempt in any way to discourage the Purchased
Business Employees from accepting the Purchaser’s offer of employment.

 

  (c) The Vendor is responsible for and shall indemnify and hold the Purchaser
harmless for and against any and all liability for one half of all pay in lieu
of notice, severance payments, damages for wrongful dismissal and all legal and
other related costs in respect of the termination by the Vendor of the
employment of any Purchased Business Employee who does not accept the
Purchaser’s offer of employment.

 

  (d) The Purchaser shall be responsible for and hereby agrees to pay to Vendor
forthwith upon demand one half of all pay in lieu of notice, severance payments,
damages for wrongful dismissal and all legal and other related costs in respect
of the termination by the Vendor of the employment of any Purchased Business
Employee who does not accept the Purchaser’s offer of employment.

 

4.4 Books and Records

The Purchaser covenants and agrees to maintain in safekeeping the Books and
Records delivered pursuant to Section 6.2(i) for seven years following the
Closing Date which relate to periods prior to the Closing Date and, if the
Vendor is investigated or audited by a taxation or other Governmental Authority
or for any other bona fide business purpose that is not adverse to the interests
of the Purchaser, the Purchaser will allow the Vendor and the Vendor’s
authorized Representatives and advisors reasonable access to such records at the
request of the Vendor, acting reasonably, for the purpose of attending to such
investigation, audit or bona fide business purpose, which access shall be at
locations to be determined by the Purchaser, during normal business hours and at
such other time or times as the Purchaser may determine and in such a manner so
as not to interfere unreasonably with the conduct of the business of Purchaser.

 

4.5 Vendor’s Future Actions

After the Closing, the Vendor shall not, directly or indirectly, take any action
which would adversely affect the Purchaser’s ownership of or validity or
enforceability of any of the Purchased Assets or operation of the Purchased
Business. Notwithstanding the foregoing, nothing in this Section 4.5 will
restrict the ability of the Vendor from taking any actions it deems appropriate
in furtherance of winding up its business and terminating its existence.

 

4.6 Planning Act (Ontario) Compliance

This Agreement will be effective to create an interest in the Real Property
located in the Province of Ontario only if the subdivision and part lot control
provisions of the Planning Act (Ontario) are complied with. The Vendor hereby
covenants to proceed diligently at its expense to obtain any necessary severance
consent on or before Closing. In the event that a severance consent is required
for any Real

 

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Property but such consent has not been obtained by Closing, the Purchaser agrees
to proceed with closing the transactions contemplated in this Agreement for all
other Real Property, and the property that required a severance consent shall be
transferred as soon as such consent has been obtained. Between Closing and the
date of transfer of the property requiring consent, the Vendor shall lease such
property to the Purchaser, under which lease the Purchaser will pay an annual
rent of $1.00 and will also pay, perform and discharge all obligations arising
or accruing with respect to such property during that period.

 

4.7 Damaged Assets

The Purchase Price and the obligations to close will be unaffected by loss or
damage to Purchased Assets, provided the Vendor agrees to use commercially
reasonable efforts to diligently pursue insurance recovery in connection with
such loss or damage, and to promptly pay to the Purchaser all insurance proceeds
received by the Vendor after Closing relating to any insurance policies held by
the Vendor in respect of the Purchased Assets and resulting from damage related
to the Purchased Assets.

 

4.8 Transition Agreement

Concurrently with the execution of this Agreement, Rentech and the Purchaser
entered into the Transition Agreement respecting certain transition services.

ARTICLE 5

CONDITIONS TO CLOSING

 

5.1 Conditions for the Benefit of the Purchaser

The obligation of the Purchaser to purchase the Purchased Assets from the Vendor
pursuant hereto and consummate any other transaction contemplated hereby is
subject to the following conditions (which are for the exclusive benefit of the
Purchaser) being satisfied in all respects at the Closing Time, or such earlier
time as is specified below provided, however, that any such condition may be
waived in writing by the Purchaser, in whole or in part, at any time, without
prejudice to any of the other rights of the Purchaser hereunder:

 

  (a) the representations and warranties of the Vendor in this Agreement shall
be true and correct in all material respects at the Closing Time with the same
force and effect as if made at and as of such time, except to the extent such
representations and warranties speak as of an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as at such date, and the Vendor shall have delivered, on the Closing
Date, a certificate confirming the foregoing dated the Closing Date, addressed
to the Purchaser and duly executed by a senior officer of the Vendor;

 

  (b) the Vendor shall have complied and performed, in all material respects,
with all of the covenants and obligations set forth in this Agreement to be
complied with, and performed by the Vendor at or prior to the Closing Time
pursuant hereto, and the Vendor shall have delivered, on the Closing Date, a
certificate confirming the foregoing dated the Closing Date, addressed to the
Purchaser and duly executed by a senior officer of the Vendor;

 

  (c) Brad Sampson and at least 80% of the Purchased Business Employees (other
than such as are on long term disability or otherwise not then reporting for
work) shall have agreed to accept the Purchaser’s offer of employment;

 

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  (d) Except as set forth on Schedule 5.1(d), no action, suit, proceeding or
investigation shall have been commenced or threatened against the Vendor, which,
in the reasonable opinion of Purchaser’s counsel, if successful, would have a
materially adverse effect on the Purchased Business or the Purchased Assets;

 

  (e) there shall be no Order issued delaying, restricting or preventing, and no
Claim pending or threatened by any Governmental Authority to enjoin, delay,
restrict or prohibit the purchase and sale of any of the Purchased Assets, as
contemplated hereby, or the right of the Purchaser to conduct the Purchased
Business or to own or use the Purchased Assets following the Closing Time;

 

  (f) all Required Approvals shall have been obtained, in each case, on terms
acceptable to the Purchaser, acting reasonably;

 

  (g) subject to Section 4.7, there shall have been no material adverse change
in the condition of the Purchased Business during the Interim Period;

 

  (h) the Vendor shall have delivered evidence satisfactory to the Purchaser,
acting reasonably, that all Encumbrances other than Permitted Encumbrances have
been discharged or released as to the Purchased Assets such that the Purchased
Assets are free and clear of all Encumbrances other than Permitted Encumbrances;
and

 

  (i) at Closing, the Vendor shall have delivered all items which it is required
to deliver pursuant to Section 6.2.

 

5.2 Conditions for the Benefit of the Vendor

The Vendor’s obligations to the Purchaser pursuant hereto are subject to the
following conditions (which are for the exclusive benefit of the Vendor) being
satisfied in all respects at the Closing Time or such earlier time as is
specified below, provided, however, that any such condition may be waived in
writing by the Vendor, in whole or in part, at any time, without prejudice to
any of the rights of the Vendor hereunder:

 

  (a) the representations and warranties of the Purchaser in this Agreement
shall be true and correct in all material respects at the Closing Time with the
same force and effect as if made at and as of such time, except to the extent
such representations and warranties speak as of an earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as at such date, and the Purchaser shall have delivered, on the Closing
Date, a certificate confirming the foregoing dated the Closing Date, addressed
to the Vendor and signed by two senior officers of the Purchaser;

 

  (b) the Purchaser shall have complied and performed, in all material respects,
with all of the covenants and obligations set forth in this Agreement to be
complied with, and performed by, the Purchaser at or prior to the Closing Time
pursuant hereto, the Purchaser shall have delivered, on the Closing Date, a
certificate confirming the foregoing dated the Closing Date, addressed to the
Vendor and signed by two senior officers of the Purchaser;

 

  (c)

there shall be no Order issued delaying, restricting or preventing, and no Claim
pending or threatened by any Governmental Authority to enjoin, delay, restrict
or prohibit the purchase and sale of any of the Purchased Assets, as
contemplated hereby, or the right of

 

23

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  the Purchaser to conduct the Purchased Business or to own or use the Purchased
Assets following the Closing Time; and

 

  (d) at Closing, the Purchaser shall have delivered all items it is required to
deliver pursuant to Section 6.3.

ARTICLE 6

CLOSING

 

6.1 Closing

The Closing shall take place by way of electronic exchange of closing
documentation and electronic fund transfer, without the need for a physical
meeting of the Parties.

 

6.2 Deliveries by the Vendor at Closing

At Closing, the Vendor, shall deliver, or cause to be delivered to the
Purchaser:

 

  (a) a certificate of the appropriate Governmental Authorities, dated on or
about the Closing Date, evidencing the existence of the Vendor and its good
standing with respect to the filing of annual reports in the jurisdictions in
which it is incorporated;

 

  (b) certified copy of directors’ resolutions of the Vendor approving this
Agreement and the transactions contemplated hereby;

 

  (c) certified copy of the shareholders’ resolution of the Vendor approving
this Agreement and the transactions contemplated hereby;

 

  (d) a certificate of incumbency of the Vendor;

 

  (e) all Required Approvals, in form and substance acceptable to the Parties,
acting reasonably;

 

  (f) evidence of discharge of all Encumbrances which are not Permitted
Encumbrances;

 

  (g) one or more executed general conveyances providing for the sale,
assignment, transfer and conveyance of the Purchased Assets and assumption of
the Assumed Liabilities, in substantially the form settled by the Parties
concurrently with the execution of this Agreement;

 

  (h) an executed general assignment providing for the sale, assignment,
transfer and conveyance of the Assumed Contracts, in the form settled by the
Parties concurrently with the execution of this Agreement;

 

  (i) the Books and Records;

 

  (j) transfer(s) of the Real Property by the Vendor to the Purchaser in
registerable form;

 

  (k) an irrevocable direction to the Vendor’s Counsel to forthwith use the
Security Amount to vacate the Agrirecycle Liens by payment of the Security
Amount into court together with an undertaking by the Vendor’s Counsel to
provide evidence, within seven (7) days of Closing, that the Agrirecycle Liens
have been vacated from title; and

 

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  (l) such other documents and instruments as the Purchaser’s Counsel may
reasonably require in order to evidence the transfer of the Purchased Assets as
provided for herein.

Where applicable, all deliveries by the Vendor at Closing shall be in the form
settled by the Parties concurrently with the execution of this Agreement and
attached hereto where so referenced.

 

6.3 Deliveries by Purchaser at Closing

At Closing, the Purchaser shall deliver to the Vendor:

 

  (a) a certificate of the appropriate Governmental Authorities, dated the
Closing Date, evidencing the existence and good standing of the Purchaser in the
jurisdictions in which it is incorporated;

 

  (b) certified copy of the directors’ resolutions of the Purchaser approving
this Agreement and the transactions contemplated hereby;

 

  (c) a certificate of incumbency of the Purchaser;

 

  (d) one or more executed general conveyances providing for the sale,
assignment, transfer and conveyance of the Purchased Assets and assumption of
the Assumed Liabilities in substantially the form settled by the Parties
concurrently with the execution of this Agreement;

 

  (e) an executed general assignment providing for the sale, assignment,
transfer and conveyance and assumption of the Assumed Contracts in the form
settled upon by the Parties concurrently with the execution of this Agreement;

 

  (f) the Closing Cash Amount;

 

  (g) such other documents and instruments as the Vendor’s Counsel may
reasonably require.

Where applicable, all deliveries by the Purchaser at Closing shall be in the
form settled by the Parties concurrently with the execution of this Agreement
and attached hereto where so referenced.

ARTICLE 7

INDEMNITIES

 

7.1 Purchaser Indemnity

After Closing, the Purchaser agrees to indemnify and save harmless the Vendor
and its Affiliates, directors, officers, employees, agents and control persons,
as applicable, from and against any and all Losses which they suffer, sustain,
pay or incur, directly or indirectly, as a consequence of or in connection with:

 

  (a) any misrepresentation, inaccuracy, incorrectness or breach of any
representation or warranty made by the Purchaser in this Agreement or in any
document or certificate given or delivered by any of them pursuant to this
Agreement;

 

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  (b) any non-performance or non-fulfillment of any covenant or agreement of the
Purchaser in this Agreement or in any document given or delivered by the
Purchaser in order to carry out the transactions contemplated hereby; or

 

  (c) the Assumed Liabilities.

The foregoing obligation and indemnification shall be subject to the provisions
of Sections 7.3 and 7.4.

 

7.2 Vendor Indemnity

After Closing, the Vendor agrees to indemnify and save harmless the Purchaser
and its Affiliates, directors, officers, employers, agents and control persons,
as applicable, from and against any and all Losses which they suffer, sustain,
pay or incur, directly or indirectly, as a consequence of or in connection with:

 

  (a) any misrepresentation, inaccuracy, incorrectness or breach of any
representation or warranty made by the Vendor in this Agreement or in any
document or certificate given or delivered by any of them pursuant to this
Agreement;

 

  (b) any non-performance or non-fulfillment of any covenant or agreement of the
Vendor in this Agreement or in any document given or delivered by the Vendor in
order to carry out the transactions contemplated hereby; or

 

  (c) the Retained Liabilities.

The foregoing obligation and indemnification shall be subject to the provisions
of Sections 7.3 and 7.4.

 

7.3 Limitations on Indemnities

 

  (a) Other than as specifically provided for herein, no Claim in respect of a
breach of any representation or warranty made in this Agreement shall be made or
be enforceable, whether by legal proceedings or otherwise, unless written notice
of such Claim is given by the Party seeking redress to the Party from whom
redress is sought on or before the expiry of 24 months (except that the
representations relating to tax matters shall survive for 90 days after the
expiry of the applicable assessment period under the governing statute) from the
Closing Date.

 

  (b) The obligations of the Purchaser under Section 7.1 shall be subject to the
following limitations:

 

  (i) no party shall be entitled to make any indemnity claim under
Section 7.1(a) until the aggregate amount of all Claims against the Purchaser
exceeds $50,000.00. Once the aggregate amount of all Claims against the
Purchaser exceeds $50,000.00, then the Vendor shall be entitled to make a Claim
for the damages, Losses, costs, Liabilities and expenses incurred and for which
it is entitled to indemnity pursuant to Section 7.1(a) which exceeds $50,000.00;
and

 

  (ii) the total aggregate maximum liability of the Purchaser pursuant to
Section 7.1 shall not exceed the greater of (i) $3,200,000.00 and (ii) the
Adjusted Purchase Price;

 

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provided however, the limits set forth in this Section 7.3(b) shall not apply in
the event of the wilful misconduct, intentional misrepresentation or fraud by
the Purchaser.

 

  (c) The obligations of the Vendor under Section 7.2 shall be subject to the
following limitations:

 

  (i) no party shall be entitled to make any indemnity claim under
Section 7.2(a) until the aggregate amount of all Claims against the Vendor
exceeds $50,000.00. Once the aggregate amount of all Claims against the Vendor
exceeds $50,000.00, then the Purchaser shall be entitled to make a Claim for the
damages, Losses, costs, Liabilities and expenses incurred and for which it is
entitled to indemnity pursuant to Section 7.2(a) which exceed $50,000.00; and

 

  (ii) the total aggregate maximum liability of the Vendor pursuant to
Section 7.2 shall not exceed the greater of (i) 3,200,000.00 and (ii) the
Adjusted Purchase Price, provided however, the limits set forth in this
Section 7.3(c) shall not apply in the event of the wilful misconduct,
intentional misrepresentation or fraud by the Vendor.

 

  (d) Losses of the Purchaser hereunder shall be deemed reduced by the amount of
any insurance proceeds received by the Purchaser with respect to such Losses.

 

7.4 Indemnification Procedure

The following provisions will apply to any claim by any person having the right
to be indemnified pursuant to this Agreement (hereinafter, in this Section 7.4,
any person making a claim for indemnification pursuant to this Agreement is
referred to as the “Indemnified Party”, the Person against whom the claim for
indemnification is made pursuant to this Agreement is referred to as the
“Indemnifying Party” and any such claim for indemnity is referred to as the
“Indemnity Claim”).

 

  (a) Promptly after becoming aware of any matter in respect of which it may
assert an Indemnity Claim, the Indemnified Party will provide written notice of
the Indemnity Claim to the Indemnifying Party, specifying (to the extent that
information is available) the factual basis for the Indemnity Claim and the
amount of the Indemnity Claim or, if an amount is not then determinable, an
estimate of the amount of the Indemnity Claim, if an estimate is feasible in the
circumstances; provided, however, that no delay on the part of the Indemnified
Party in notifying the Indemnifying Party will relieve the Indemnifying Party
from its obligation to indemnify the Indemnified Party unless (and only to the
extent that) the Indemnifying Party is materially prejudiced by such delay.

 

  (b)

If an Indemnity Claim relates to an alleged liability relating to a Person who
is not a Party to this Agreement (hereinafter in this Section 7.4 called a
“Third Party Liability”), including any Governmental Authority, and in relation
to such alleged Third Party Liability, the Indemnified Party is required by
applicable law to make a payment to a third party before the relevant procedure
for challenging the existence or quantum of the alleged Third Party Liability
can be implemented or completed, the Indemnified Party may, notwithstanding any
other provision of this Section 7.4, make such payment and forthwith demand
reimbursement for such payment from the Indemnifying Party; provided that, if
the alleged Third Party Liability, as finally determined (upon completion of
settlement negotiations or applicable legal proceedings), is less than the
amount that is so paid by the Indemnifying Party, then the Indemnified Party
will, forthwith following

 

27

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  such final determination and receipt of the overpaid amount from the third
party, pay to the Indemnifying Party the amount by which the Third Party
Liability, as finally determined, is less than the amount that was so paid by
the Indemnifying Party.

 

  (c) The Indemnified Party will not negotiate, settle, compromise or pay
(except in the case of payment of a judgment) any Third Party Liability in
respect of which it has or proposes to assert an Indemnity Claim, except with
the prior consent of the Indemnifying Party (which consent will not be
unreasonably withheld or delayed).

 

  (d) With respect to any Third Party Liability, provided the Indemnifying
Party: (i) admits, within 30 days of receipt of notice of the Third Party
Liability from the Indemnified Party, to the Indemnified Party’s right to
indemnification for the amount of such Third Party Liability that may at any
time be determined or settled; (ii) provides the Indemnified Party with evidence
reasonably satisfactory to the Indemnified Party that the Indemnifying Party
will have the financial resources to defend Third Party Liability and fulfill
its indemnification obligations hereunder; and (iii) represents that it will
conduct the defense of the Third Party Liability actively and diligently, and
provided further that (iv) the action or other proceeding respecting prosecution
of the Third Party Liability involves only a claim for money damages and not a
claim for equitable relief; and (v) the settlement of, or an adverse judgment
with respect to, the Third Party Liability is not, in the good faith judgment of
the Indemnified Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the Indemnified
Party, then in any legal, administrative or other proceedings in connection with
the matters forming the basis of the Third Party Liability, the following
provisions will apply:

 

  (i) except as contemplated by Section 7.4(d)(iii), the Indemnifying Party will
have the right to assume carriage of such legal, administrative or other
proceedings through counsel of its choice reasonably satisfactory to the
Indemnified Party, but the Indemnified Party will have the right and will be
given the opportunity, to the extent the same does not give rise to a material
conflict of interest, to participate in the defense of the Third Party
Liability, to consult with the Indemnifying Party in the settlement of the Third
Party Liability and the conduct of such legal, administrative and other
proceedings (including consultation with counsel);

 

  (ii) to the extent the same does not give rise to a material conflict of
interest, the Indemnifying Party will co-operate with the Indemnified Party in
relation to the Third Party Liability, will keep the Indemnified Party fully
advised with respect thereto, will provide the Indemnified Party with copies of
all relevant documentation as it becomes available, will provide the Indemnified
Party with access to all records and files relating to the defence of the Third
Party Liability and will meet with Representatives of the Indemnified Party at
all reasonable times to discuss the Third Party Liability; and

 

  (iii) notwithstanding Sections 7.4(d)(i) and (ii), the Indemnifying Party will
not settle the Third Party Liability or conduct any legal, administrative or
other proceedings in any manner that could, in the reasonable opinion of the
Indemnified Party, have a material adverse effect on the Indemnified Party
except with the prior written consent of the Indemnified Party.

 

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  (e) If, with respect to any Third Party Liability, any of the conditions set
forth in the opening sentence of Section 7.4(d) is or becomes unsatisfied, or in
the event that the Indemnifying Party does not act to diligently defend against
such Third Party Liability or declines to assume carriage of the applicable
legal, administrative or other proceedings, then the following provisions will
apply:

 

  (i) the Indemnified Party, at its discretion, may assume carriage of the
settlement or of any legal, administrative or other proceedings relating to the
Third Party Liability and may defend or settle the Third Party Liability on such
terms as the Indemnified Party, acting in good faith, considers advisable; and

 

  (ii) any costs, damages and expenses incurred or suffered by the Indemnified
Party in the settlement of such Third Party Liability or the conduct of any such
legal, administrative or other proceedings will be added to the amount of the
Indemnity Claim.

 

  (f) With respect to any Claim that does not involve a Third Party Liability (a
“Direct Claim”), following receipt of notice from the Indemnified Party of the
Direct Claim, the Indemnifying Party shall have 60 days to make such
investigation of the Direct Claim as it considers necessary or desirable. For
the purpose of such investigation, the Indemnified Party shall make available to
the Indemnifying Party the information relied upon by the Indemnified Party to
substantiate the Direct Claim, together with all such other information in the
possession of the Indemnified Party as the Indemnifying Party may reasonably
request. If the Indemnified Party and the Indemnifying Party agree, prior to the
expiration of such 60-day period (or any mutually agreed upon extension
thereof), to the validity and amount of such Direct Claim, the Indemnifying
Party shall forthwith pay to the Indemnified Party the full agreed upon amount
of the Direct Claim. Failing such agreement and payment, the Indemnified Party
may commence an action or otherwise pursue any remedy it may have against the
Indemnifying Party.

ARTICLE 8

TERMINATION

 

8.1 Termination

This Agreement may be terminated and the transactions contemplated hereby may be
abandoned, at any time prior to the Closing:

 

  (a) by mutual written consent of the Vendor, on the one hand, and the
Purchaser, on the other hand;

 

  (b) by the Purchaser on written notice to the Vendor if the Closing shall not
have occurred on the Closing Date and any of the conditions set forth in
Section 5.1 hereof shall not have been satisfied by the Closing Date, provided
that the Purchaser shall have complied in all material respects with its
obligations hereunder;

 

  (c) by the Vendor on written notice to the Purchaser if the Closing shall not
have occurred on the Closing Date and any of the conditions set forth in
Section 5.2 hereof shall not have been satisfied by the Closing Date, provided
that the Vendor shall have complied in all material respects with its respective
obligations hereunder; or

 

29

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  (d) by either Party if there has been a material breach of this Agreement by
the other Party and such breach has not been waived by the non-breaching Party;
and

any such notice of termination given by a Party shall specify the basis on which
the Party seeks to terminate this Agreement.

 

8.2 Effect of Termination

In the event of termination of this Agreement pursuant to Section 8.1, this
Agreement shall thereupon cease to have any further force and effect and each
Party shall thereafter have no further obligations or liability thereunder to
any other Party, except that the provisions of Section 8.1, this Section 8.2,
Section 10.5, Section 10.8 and Section 10.13 shall survive any termination of
this Agreement.

 

8.3 Survival

Subject to the limitations and provisions set forth in this Agreement,
notwithstanding the occurrence of Closing and the items delivered at Closing
pursuant hereto, the representations, warranties, covenants and indemnities
contained in this Agreement shall survive the Closing and the delivery of the
items delivered at Closing pursuant hereto for the benefit of the Parties in
accordance with terms hereof. Notwithstanding any other provision of this
Agreement, no limitation in respect of the survival of any provision of this
Agreement or the period in respect of which any Claims or other recourse may be
made shall apply insofar as the breach of the provision or the matter in respect
of which recourse is sought involves fraud on the part of the Party or Parties
against whom the provision is sought to be enforced or from whom such recourse
is sought. If any document executed at or after Closing pursuant hereto is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall prevail unless the Parties expressly and explicitly agree to the
contrary.

ARTICLE 9

NOTICES

 

9.1 Notices

Any notice, consent, waiver, direction or other communication required or
permitted to be given under this Agreement by a Party to any other Party shall
be in writing and shall be delivered by email, hand delivery, facsimile
transmission or (provided that the mailing Party does not know and should not
reasonably have known of any disruption or anticipated disruption of postal
service which might affect delivery of the mail) by registered mail (postage
prepaid), addressed to the Party to whom the notice is to be given, at its
address for service herein. Any notice, consent, waiver, direction or other
communication aforesaid shall, if sent by email be deemed to have been given and
received on the date on which a delivery receipt is received by email from the
Party to whom the email was sent, if hand delivered or delivered by facsimile
transmission, be deemed to have been given and received on the date on which it
was hand delivered or delivered by facsimile transmission to the address
provided herein (if a Business Day and, if not, the next succeeding Business
Day) and if sent by registered mail be deemed to have been given and received on
the third Business Day at the point of delivery following the date on which it
was so sent.

 

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9.2 Address for Service

The address for service of each of the Parties hereto shall be as follows:

 

  (a) if to the Vendor:

RTK WP2 Canada, ULC

10880 Wilshire Blvd, Suite 1101

Los Angeles, CA 90024 USA

Attention:    Paul Summers

Facsimile:    +1 310.571.9799

Email:          psummers@rentk.com

with a copy to:

Norton Rose Fulbright Canada LLP

200 Bay Street, P.O. Box 84

Toronto, ON M5J 2Z4 Canada

Attention:    Nikolai A. Kovtouchenko

Facsimile:    +1 416.216.3930

Email:          nikolai.kovtouchenko@nortonrosefulbright.com

 

  (b) if to the Purchaser:

2607043 Ontario Inc.

Corner of Highway 101-129

Chapleau, ON P0M 1K0 Canada

Attention:     Mark Guillemette

Facsimile:     +1 705.264.2541

Email:           mark@truenorthtimber.com

with a copy to:

Perras Mongenais

10B Circle Street

Kapuskasing, ON P5N 1T3 Canada

Attention:     Pierre Perras

Facsimile:     +1 705.335.3939

Email:           pierreperras01@gmail.com

or such other address as may be designated by notice to the other Parties.

 

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ARTICLE 10

MISCELLANEOUS

 

10.1 Retention of Records and Confidential Information

The Purchaser acknowledges and agrees that the Vendor will be permitted to
retain copies of the Books and Records for such period after the Closing Date as
is required by any applicable Law. Both before and after the Closing Date, the
Vendor will, and will cause its advisors and other Representatives to:

 

  (a) promptly provide to the Purchaser all information in its possession or
under its control relating to the Purchased Assets;

 

  (b) keep strictly confidential all information relating to the Purchased
Assets unless: (i) such information (other than Transferred Information) is or
becomes generally available to the public other than as a result of a disclosure
by the Vendor in violation of this Agreement; (ii) the disclosure of such
information is expressly permitted, in writing, by the Purchaser; or (iii) the
disclosure of such information is required by applicable Law or by a
Governmental Authority (provided that the Vendor shall provide the Purchaser
with prompt written notice of same so that the Purchaser may either seek a
protective Order or other appropriate remedy, and the Vendor shall furnish only
the disclosure that is required); and

 

  (c) not use or permit any other Person to use any information relating to any
of the Purchased Assets for any purpose whatsoever, unless such information
(other than Transferred Information) is or becomes generally available to the
public, other than as a result of a disclosure by the Vendor in violation of
this Agreement, or the use of such information is expressly permitted, in
writing, by the Purchaser.

 

10.2 Privacy

In addition to and notwithstanding its other obligations herein, the Vendor
covenants and agrees to take commercially reasonable efforts to notify the
Purchaser prior to Closing of the primary purposes for which the Transferred
Information was initially collected.

In addition to and notwithstanding its other obligations herein, the Purchaser
covenants and agrees: (i) prior to the completion of the transactions
contemplated herein, to collect, use and disclose the Transferred Information
solely for the purpose of reviewing and completing the transactions contemplated
herein, including determining to complete such transactions; (ii) after the
completion of the transactions contemplated herein, to collect, use and disclose
the Transferred Information only for those purposes for which the Vendor has
notified the Purchaser the Transferred Information was initially collected from,
or in respect of, the individual to which such Transferred Information relates
or for the completion of the transactions contemplated herein, unless (A) the
Vendor or the Purchaser has first notified such individual of such additional
purpose, and where required by all applicable laws, by-laws, rules, regulations,
orders, ordinances, protocols, codes, guidelines, policies, notices, directions
and judgments or other requirements of any Governmental Authority, obtained the
consent of such individual to such additional purpose, or (B) such use or
disclosure is permitted or authorized by Law, without notice to, or consent
from, such individual; (iii) where required by Law, promptly notify the
individuals to whom the Transferred Information relates that the transactions
contemplated herein have taken place and that the Transferred Information has
been disclosed to the Purchaser; (iv) to return or destroy the Transferred
Information, at the option of the Vendor, should the transactions contemplated
herein not be completed; (v) to use all

 

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reasonable efforts to protect and safeguard the Transferred Information
including, without limitation, to protect the Transferred Information from loss
or theft, or unauthorized access disclosure, copying, use, modification,
disposal or destruction and promptly advise the Vendor should any such loss,
theft or unauthorized activity occur prior to the completion of the transactions
contemplated herein; and (vi) where the disclosure or transfer of Transferred
Information to the Purchaser requires the consent of, or the provision of notice
to, the individual to which such Transferred Information relates, to (A) not
require or accept the disclosure or transfer of such Transferred Information
until the Vendor has first notified such individual of such disclosure or
transfer and the purpose for same, and where required by law, obtained the
individual’s consent to same and (B) only collect, use and disclose such
information to the extent necessary to complete the transactions contemplated
herein and as authorized or permitted by law.

 

10.3 Further Assurances

Each Party shall, from time to time, and at all times hereafter, at the request
of another Party, but without further consideration, do all such further acts
and execute and deliver all such further documents and instruments as shall be
reasonably required in order to fully perform and carry out the terms and intent
hereof.

 

10.4 Time of the Essence

Time shall be of the essence of this Agreement.

 

10.5 Public Announcements

No public announcement or press release concerning the sale and purchase of the
Purchased Assets shall be made by a Party or its Affiliates without the prior
written consent and joint approval of the other Party, which consent and
approval shall not be unreasonably withheld or delayed; provided that nothing
contained herein shall prevent the Vendor or any of its Affiliates at any time
furnishing any information to the public if required by Laws or the rules of an
applicable stock exchange.

 

10.6 Amendments and Waiver

No modification of or amendment to this Agreement shall be valid or binding
unless set forth in writing and duly executed by all of the Parties hereto and
no waiver of any breach of any term or provisions of this Agreement shall be
effective or binding unless made in writing and signed by the Party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived. No failure on the part of any Party in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy in law or
in equity or by statute or otherwise conferred.

 

10.7 Entire Agreement

This Agreement together with the agreements and other documents to be delivered
pursuant to this Agreement constitute the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties. There are no warranties, representations or other
agreements between the Parties in connection with the subject matter of this
Agreement except as specifically set forth in this Agreement and any document
delivered pursuant to this Agreement. No supplement, modification or waiver or
termination of this Agreement shall be binding unless executed in writing by the
Party to be bound thereby.

 

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10.8 Applicable Law

This Agreement shall be construed and enforced in accordance with the Laws of
the Province of Ontario and the federal Laws of Canada applicable therein. The
Parties irrevocably and unconditionally attorn and submit to the exclusive
jurisdiction of the courts of competent jurisdiction in the Province of Ontario
in respect of any action, application, reference or other proceeding arising out
of or related to this Agreement and agree that all Claims in respect of any such
action, application, reference or other proceeding shall be heard and determined
in such Ontario courts. Each of the Parties irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action, application, reference or proceeding.

 

10.9 Severability

If any one or more of the provisions or parts thereof contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect
in any jurisdiction, the remaining provisions or parts thereof contained herein
shall be and shall be conclusively deemed to be, as to such jurisdiction,
severable therefrom and:

 

  (a) the validity, legality or enforceability of such remaining provisions or
parts thereof shall not in any way be affected or impaired by the severance of
the provisions or parts thereof severed; and

 

  (b) the invalidity, illegality or unenforceability of any provision or part
thereof contained in this Agreement in any jurisdiction shall not affect or
impair such provision or part thereof or any other provisions of this Agreement
in any other jurisdiction.

 

10.10 Execution in Counterpart

This Agreement may be executed in any number of counterparts with the same
effect as if all signatories to the counterparts had signed one document, all
such counterparts shall together constitute, and be construed as, one instrument
and each of such counterparts shall, notwithstanding the date of its execution,
be deemed to bear the date first above written. Delivery of counterparts may be
effected by facsimile transmission or scanned emails.

 

10.11 Benefit of the Agreement

This Agreement shall enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
Parties. No Person other than the Parties and their successors and permitted
assigns shall be entitled to any rights or benefits hereunder.

 

10.12 Assignment

This Agreement may not be assigned by any Party without the prior consent of the
other Parties. The Purchaser may direct the Vendor at least three Business Days
prior to the Closing Date that title to any of the Purchased Assets is to be
registered in the name of one, or more, Affiliates of the Purchaser; provided
that the Purchaser continues to be bound by this Agreement.

 

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10.13 Costs

Each Party shall be responsible for all costs and expenses (including the fees
and disbursements of legal counsel and other advisors) incurred by it in
connection with the negotiation, preparation and execution of this Agreement and
the transactions contemplated hereby.

 

10.14 No Partnership

It is not the intent or purpose of the Agreement to create, and this Agreement
shall not be construed as creating, any association, partnership or syndicate.

 

10.15 Reliance

The Parties acknowledge and agree that they have entered into this Agreement in
reliance upon each of the representations, warranties, covenants and agreements
herein of the other party hereto.

 

10.16 No Registration of Agreement

The Purchaser shall not register or cause to be registered this Agreement or
notice thereof or any other document or claim against title to the Real
Property.

[The remainder of this page is intentionally left blank]

 

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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.

 

2607043 ONTARIO INC. Per:  

/s/ Mark Guillemette

 

Name:   Mark Guillemette

Title:     President and CEO

RTK WP2 CANADA, ULC Per:  

/s/ Paul Summers

 

Name:  Paul Summers

Title:    Chief Financial Officer