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EXHIBIT 10.4
SULPHUR HANDLING FACILITY PROJECT AGREEMENT
BETWEEN
▇▇▇▇▇▇ TERMINALS INC.
AND
SULPHUR CORPORATION OF CANADA LTD.
DATED AS OF JANUARY 1, 1999
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TABLE OF CONTENTS
1. DEFINITIONS ....................................................................2
1.1 Definitions ................................................................2
1.2 Canadian Dollars ...........................................................3
1.3 Schedules ..................................................................3
2. SUBLEASES.......................................................................4
3. OPERATING AGREEMENT ............................................................4
4. PROJECT CONDITIONS .............................................................4
4.1 Mutual Conditions ..........................................................4
4.2 RTI Conditions .............................................................5
4.3 Agreement to Co-operate ....................................................5
4.4 Mutual Consideration regarding Conditions ..................................6
4.5 Waiver of Conditions .......................................................6
5. PROJECT PLANNING AND IMPLEMENTATION.............................................6
5.1 Site Information ...........................................................6
5.2 General Design Parameters ..................................................6
5.3 Project Plans and Specifications ...........................................7
5.4 Project Timetable ..........................................................8
5.5 Regulatory Approvals and Permits ...........................................8
5.6 Engineers and Contractors ..................................................8
5.7 Approvals ..................................................................8
6. CONSTRUCTION OF THE PROJECT.....................................................8
6.1 Commencement of Construction ...............................................8
6.2 Construction Contracts .....................................................9
6.3 Performance/Security Bonds .................................................9
6.4 Letter of Credit ...........................................................9
6.5 Insurance .................................................................10
6.6 Builders' Liens ...........................................................10
6.7 Site Safety Rules and Regulations .........................................10
6.8 No Interference with RTI Operations .......................................10
6.9 Indemnification ...........................................................11
7. OWNERSHIP AND MAINTENANCE OF IMPROVEMENTS .....................................11
7.1 Ownership of SCC Improvements .............................................11
7.2 Ownership of RTI Improvements .............................................11
7.3 Maintenance of Improvements ...............................................11
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8. ASSIGNMENT.....................................................................11
8.1 Assignment by SCC ........................................................11
8.2 Assignment by RTI ........................................................12
8.3 Change of Control of SCC .................................................12
9. LABOUR MATTERS ................................................................12
9.1 Open Site ................................................................12
9.2 Collective Agreement .....................................................12
10. DEFAULT AND TERMINATION .......................................................12
10.1 Events of Default .......................................................12
10.2 Remedies ................................................................13
10.3 Right of Termination if Subleases Terminated ............................14
10.4 Force Majeure Termination ...............................................14
10.5 Remedies Cumulative and Waivers .........................................14
11. FORCE MAJEURE .................................................................14
11.1 Definition of "Force Majeure ............................................14
11.2 Effect of Force Majeure .................................................15
12. ENUREMENT .....................................................................15
13. ENTIRE AGREEMENT ..............................................................15
14. CONFIDENTIALITY ...............................................................15
14.1 Definition of Confidential Information ...................................15
14.2 Treatment of Confidential Information ....................................16
14.3 Release of Confidential Information ......................................16
15. NOTICES .......................................................................16
16. APPLICABLE LAW AND INTERPRETATION .............................................17
17. PUBLIC ANNOUNCEMENTS ..........................................................17
18. COUNTERPARTS ..................................................................18
19. DISPUTE RESOLUTION ............................................................18
19.1 Arbitration ..............................................................18
19.2 Venue.....................................................................19
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SCHEDULES:
Schedule "A" - Intentionally Deleted
Schedule "B" - Development Plan
Schedule "C" - Subleases
Schedule "D" - Operating Agreement
Schedule "E" - Letter of Credit
Schedule "F" - Site Safety Rules and Regulations
Schedule "G" - Project Timetable
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SULPHUR HANDLING FACILITY PROJECT AGREEMENT
This Agreement is dated for reference as of the 1st day of
January, 1999,
AMONG:
▇▇▇▇▇▇ TERMINALS INC., a body corporate pursuant to the laws
of Canada, having an office at ▇▇▇▇▇▇ Island, Port of Prince
Rupert, Prince Rupert, British Columbia
("RTI")
AND:
SULPHUR CORPORATION OF CANADA LTD., an Alberta company
extra-provincially registered in British Columbia under ▇▇.
▇▇▇▇▇▇ having its head office at Suite 620, Alberta Stock
Exchange Tower, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇
("SCC")
WHEREAS:
A. SCC has expressed to PRPC and RTI interest in developing, constructing and
operating a sulphur handling facility (the "Sulphur Terminal") on lands situate
on and adjacent to the lands currently leased by RTI from PRPC pursuant to a
lease dated December 18, 1981 (which lease as amended from time to time is
referred to as the "Phase I Head Lease") and on which RTI currently operates a
bulk cargo handling terminal at ▇▇▇▇▇▇ Island, Port of Prince Rupert.
B. The costs of financing, development, design and construction of the Sulphur
Terminal will be for the account of SCC which shall undertake those activities
at its sole expense.
C. RTI wishes to sublease the lands identified in the Subleases (the "Subleased
Lands") to SCC for the purpose of permitting SCC to construct the Sulphur
Terminal on the terms and conditions as provided in this Agreement. To allow RTI
to sublease all of the Subleased Lands to SCC RTI has entered into a further
lease agreement with PRPC dated as of January 1, 1999 (which lease as amended
from time to time is referred to as the "Phase 11 Head Lease") pursuant to which
RTI has leased those additional Subleased Lands which were not leased under the
Phase I Head Lease;
D. Pursuant to the terms and conditions set forth in this Agreement, RTI and SCC
will enter into Subleases for the site of the Sulphur Terminal in accordance
with the terms
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and conditions contained in Schedule "C" attached hereto and RTI and SCC will
enter into the Operating Agreement for the delivery and handling of sulphur
pursuant to the terms set forth in Schedule "D" attached hereto which, together
with the Subleases, will govern the relationship between the Coal Terminal and
the Sulphur Terminal; and
E. In order to provide a framework for design, development, construction and
operation of the Sulphur Terminal, the parties have entered into this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT:
1. DEFINITIONS
1.1 Definitions - In this Agreement, except where the context otherwise
requires:
(a) "Approved Plans" means the plans and specifications for the
Project approved by SCC, RTI and PRPC pursuant to Subsection
5.3.
(b) "Coal Terminal" means the ▇▇▇▇▇▇ Island Coal Terminal.
(c) "Development Plan" means that certain Development Plan dated
as at March 5, 1999 prepared by SCC, a copy of which is
attached hereto as Schedule "B" hereto.
(d) "Operating Agreement" has the meaning given to it in
Subsection 3. 1.
(e) "Phase I Head Lease" has the meaning given to it in Recital A.
(f) "Phase 11 Head Lease" has the meaning given to it in
Recital C.
(g) "Project" means the financing, development, design and
construction of the Sulphur Terminal, including the completion
of the RTI Improvements.
(h) "Project Conditions" means the conditions set forth in
Section 4 hereof.
(i) "Project Timetable" has the meaning given to it in
Section 5.4.
(j) "PRPC" means Prince Rupert Port Corporation and includes all
entities which hereafter become the head lessor under the
Phase I Head Lease or the Phase 11 Head Lease.
(k) "RTI" means ▇▇▇▇▇▇ Terminals Inc.
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(l) "RTI Improvements" means the expansion of RTI's pipe and
conveyor delivery systems, the modification of RTI's
existing south ship loader, dock fenders and railyards,
which improvements are to be made by SCC on the RTI Lands
and which are generally described in the Development Plan.
For greater certainty, RTI Improvements includes all
improvements made by SCC on RTI Lands pursuant to the
Approved Plans and includes those portions of the conveyor
and pipe delivery systems which are located on or above the
RTI Lands.
(m) "RTI Lands" means those lands currently leased by RTI under
the Phase I Head Lease other than the portion of those lands
which forms part of the Subleased Lands.
(n) "SCC" means Sulphur Corporation of Canada Ltd.
(o) "SCC Improvements" means all of the leasehold improvements to
be made by SCC to the Subleased Lands including without
limitation the Project, but excluding the RTI Improvements.
(p) "Subleases" has the meaning given to it in Subsection 2. 1.
(q) "Subleased Lands" has the meaning given to it in Recital C.
(r) "Sulphur Terminal" means the sulphur handling facility
proposed to be financed, developed, designed and constructed
by SCC pursuant to this Agreement and which is generally
described in the Development Plan.
(s) "Year 2000 Compliant" means functional without error,
interruption or breakdown after December 31, 1999 and able to
manage and manipulate data involving dates properly and
without error or interruption, whether such dates are in the
20th or 21st century and whether entered or stored by 2 or 4
digit codes.
1.2 Canadian Dollars - All amounts referred to herein, in the Subleases and in
the Operating Agreement are expressed in Canadian dollars, unless otherwise
specified.
1.3 Schedules - The following are the Schedules to this Agreement and are
incorporated by reference and deemed to be part hereof:
Schedule "A" - Intentionally Deleted
Schedule "B" - Development Plan
Schedule "C" - Subleases
Schedule "D" - Operating Agreement
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Schedule "E" - Letter of Credit
Schedule "F" - Site Safety Rules and Regulations
Schedule "G" - Project Timetable
2. SUBLEASES
2.1 Concurrently with the execution of this Agreement RTI and SCC shall enter
into the Subleases (which Subleases as amended from time to time are referred to
as the "Subleases") in the forms attached hereto as Schedule "C".
3. OPERATING AGREEMENT
3.1 Concurrently with the execution of this Agreement RTI and SCC shall enter
into an operating and throughput agreement dated as of January 1, 1999 (which
agreement as amended from time to time is referred to as the "Operating
Agreement") in the form attached hereto as Schedule "D".
4. PROJECT CONDITIONS
4.1 Mutual Conditions - The respective obligations of RTI and SCC to proceed
with and complete the Project are and shall be subject to fulfillment of each of
the following conditions within the time specified therefor, namely:
(a) that on or before June 15, 1999 RTI, PRPC and SCC shall have
agreed upon the final plans and specifications for the Project
pursuant to Subsection 5.3; and
(b) the receipt by SCC on or before June 15, 1999 of all
governmental approvals in accordance with Subsection 5.5
hereof.
The foregoing conditions above are for the benefit of each of RTI and SCC and
may only be waived or altered by written agreement executed by RTI and SCC. If
any of the conditions in this Subsection 4.1 shall be neither fulfilled nor
waived within the time provided (as same may be extended), this Agreement, the
Subleases and the Operating Agreement shall be terminated at the option of
either party by notice in writing to the other party and, except as provided in
Section 14, no party hereto shall upon such termination have any further right
or obligation under this Agreement, the Subleases and the Operating Agreement
except for the payment of those obligations which arose prior to the date of
termination.
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4.2 RTI Conditions - The obligation of RTI to proceed with and complete the
Project is and shall be subject to fulfillment of each of the following
conditions within the time specified therefor, namely:
(a) that within 30 days of the execution of this Agreement by
both parties SCC shall have provided to RTI:
(i) audited financial statements of SCC for its most
recently completed fiscal year;
(ii) evidence of financing commitments specifically
dedicated to the Project sufficient to ensure that
the Project can be constructed in accordance with the
Development Plan and within the Project Timetable and
that normal commercial operations of the business to
be conducted at the Subleased Lands can be commenced
and carried on forthwith on completion of
construction; and
(iii) evidence of sulphur supply and sales commitments
specifically dedicated to the Project sufficient to
ensure that SCC is reasonably likely to be able to
comply with the minimum throughput commitments
specified in the Operating Agreement;
all of which information shall be in form and substance
reasonably acceptable to RTI; and
(b) that on or before June 15, 1999 SCC shall have commenced
construction of the Project and shall have delivered to RTI
the letter of credit required by Subsection 6.4(a).
The foregoing conditions are for the sole benefit of RTI and each may be waived
by RTI by notice in writing to SCC at any time prior to the time for fulfillment
thereof. If any of the conditions in this Subsection 4.2 shall be neither
fulfilled nor waived within the time provided (as same may be extended), this
Agreement, the Subleases and the Operating Agreement shall be terminated at the
option of RTI by notice in writing to SCC and, except as provided in Section 14,
no party hereto shall upon such termination have any further right or obligation
under this Agreement, the Subleases and the Operating Agreement except for the
payment of those obligations which arose prior to the date of termination.
4.3 Agreement to Co-operate - The parties agree to cooperate and to act in good
faith and to use all reasonable efforts to obtain fulfillment of the conditions
contained in Subsections 4.1 and 4.2 within the time or times required therefor
(as same may be extended).
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4.4 Mutual Consideration regarding Conditions - Notwithstanding that the
conditions precedent aforesaid may leave some discretion in RTI and SCC, the
parties hereto agree, in consideration of the sum of $10.00 paid by each of RTI
and SCC to each other and for other good and valuable consideration (receipt and
sufficiency of which the parties hereby acknowledge), the parties shall be bound
by the agreements formed upon the entering into of this Agreement, the Subleases
and the Operating Agreement unless and until the agreements formed by entering
into this Agreement, the Subleases and the Operating Agreement shall terminate
in accordance with their terms or by agreement of the parties.
4.5 Waiver of Conditions - If any party hereto elects to waive fulfillment of a
condition precedent in its favour, such waiver shall be without prejudice to any
other covenants, representations or warranties set forth in this Agreement, the
Subleases or the Operating Agreement in respect of the same subject matter. The
party waiving the condition shall retain all of its other rights and remedies
pursuant to these agreements.
5. PROJECT PLANNING AND IMPLEMENTATION
5.1 Site Information, - RTI shall provide to SCC, without cost to SCC, such
information as may from time to time be reasonably requested by SCC to assist
SCC to properly plan and design the Project in keeping with the terms of this
Agreement and good industrial construction industry practice prevailing in
British Columbia, provided that RTI shall only be required to provide that
information which is in its possession. Such information reasonably requested
may pertain to, but is not limited to:
(a) the Subleased Lands, including any existing soils and engineering
data, and utilities and infrastructure on or adjacent to the
Subleased Lands;
(b) Coal Terminal operating criteria and procedures sufficient to
permit SCC to effectively plan the proposed business operations
for the Sulphur Terminal;
(c) the physical structure, services, utilities and access to the
Coal Terminal; and
(d) the existence and location approximately within a few feet of
underground utilities and structures located in or under the
Subleased Lands.
Where such available information is not sufficient to be relied upon in the
ordinary course of prudent development and construction practice, SCC shall
obtain such further or other information as would be necessary.
5.2 General Design Parameters - The following criteria shall apply to the design
and planning of the Project by SCC:
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(a) the Sulphur Terminal will be designed and constructed to:
(i) receive and store molten sulphur;
(ii) process and store formed sulphur;
(iii) deliver molten sulphur by pipe to ocean-going
vessels; and
(iv) deliver formed sulphur by conveyor to ocean-going
vessels;
in accordance with the Approved Plans and will be fit for the
intended purpose;
(b) the Sulphur Terminal will include free-standing structures
connecting to and integrating with the pipe and conveyor
delivery systems of the Coal Terminal, complete with necessary
modifications to the existing south ship loader and dock
fenders to facilitate the ship loading of sulphur;
(c) the Sulphur Terminal will be designed and constructed of such
quantity and quality so as to provide an economic life
expectancy of the Sulphur Terminal of a minimum of 20 years.
The structure and substructure design and construction shall
be in keeping with first class industrial construction
industry standards and, without limitation, all components
thereof shall be fully Year 2000 Compliant;
(d) unless otherwise agreed by the parties in writing, utilities,
including without limitation water, sewer, gas, hydro, and
telecommunications services, may be connected to utilities on
RTI Lands but shall be separately metered and paid for by SCC,
and the connection or utilization of such utilities shall not,
in any event, disrupt RTI's operations; and
(e) the Sulphur Terminal will be designed and constructed in
accordance with all applicable federal, provincial and
municipal laws, Codes, by-laws, regulations, permits,
standards and, without limiting the generality of the
foregoing, in compliance with any and all requirements of
the Ministry of Environment, Department of Fisheries and
Oceans, Environment Canada, Workers Compensation, Employment
Standards and Canadian Coast Guard, and all drawings for the
Sulphur Terminal shall be under seal of a Professional
Engineer licensed in British Columbia.
5.3 Project Plans and Specifications - SCC will consult with RTI and PRPC in
preparation of the plans and specifications for the Project. The Project plans
and specifications shall be consistent with the Development Plan and shall be
subject to the
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written approval of RTI and PIRPC. The plans and specifications approved
pursuant to this Subsection as they may be modified from time to time are
referred to in this Agreement as the "Approved Plans". Any modifications to the
Approved Plans shall also require the written approval of RTI and PRPC.
5.4 Project Timetable - SCC covenants to fully satisfy each of the Project
milestones described in the project timetable (the "Project Timetable") set out
in Schedule "G" within the time allowed therefore in such Schedule. The Project
Timetable may be amended with the written approval of RTI (which approval may be
granted or withheld in RTI's sole discretion). It is acknowledged by SCC that
the completion of each of these milestones within the time allowed in the
Project Timetable is of utmost importance to RTI and that the failure of SCC to
complete any one of the milestones within the time allowed will allow RTI to
terminate this Agreement, together with the Subleases and the Operating
Agreement, pursuant to Section 10.
5.5 Regulatory Approvals and Permits - SCC shall be responsible for obtaining
any and all approvals, permits and authorities of any and all public bodies
having jurisdiction which are necessary or desirable for construction of the
Project, including without limitation all required environmental approvals. RTI
shall use commercially reasonable efforts to assist SCC in that regard, but it
shall not be obligated to incur any material out-of-pocket cost or expense in
doing so.
5.6 Engineers and Contractors - SCC shall be solely responsible for engaging any
and all engineers and contractors necessary or desirable to permit the Project
to be executed in accordance with the Approved Plans and the Project Timetable.
SCC undertakes to maximize, subject to availability, price and quality, on
competitive terms, the use of Canadian goods and services in the construction of
the Project. RTI shall have the right to appoint a project coordinator at its
expense to monitor the course of construction of the Project. During the course
of construction SCC shall provide to RTI such information as may reasonably be
requested by RTI from time to time regarding the construction.
5.7 Approval - All approvals or consents required to be made by either party
hereto under the terms of this Agreement and not specifically stated to be in
their sole or absolute discretion, shall not be unreasonably withheld or
delayed.
6. CONSTRUCTION OF THE PROJECT
6.1 Commencement of Construction - SCC shall not commence construction of the
Project or undertake any other activity on the Subleased Lands until such time
as each of the Project Conditions have been fully satisfied or waived, except
with the prior written approval of RTI (which approval may be granted or
withheld in RTI's sole discretion).
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6.2 Construction Contracts - SCC shall enter into written construction contracts
with one or more contractors providing for the construction of the Project
pursuant to the Approved Plans and the Project Timetable. Prior to entering into
any construction contract which provides for the construction of improvements or
any other work to be undertaken on the RTI Lands, SCC shall obtain the approval
of RTI to the terms of such contract. Furthermore, any such contract shall not
be amended in any material respect, nor cancelled by SCC, other than for default
by RTI, without the prior written consent of RTI.
6.3 Performance/Security Bonds - SCC will ensure that all contractors and
subcontractors who are to perform work on the RTI Lands provide a
performance/security bond based upon a minimum of 50% of the completed value of
the work to be performed, plus a labour and materials payment bond based upon a
minimum of 50% of the completed value of the work to be performed, issued by a
surety authorized to carry on business of suretyship in British Columbia. SCC
shall ensure that RTI is named as an insured party under such bonds and shall
also ensure that no contractor or subcontractor commences work on the RTI Lands
unless and until the required bonds are in place and RTI has been provided with
satisfactory evidence of such placement. With respect to work to be performed on
the Subleased Lands, SCC shall comply with all of the terms of the Subleases.
6.4 Letter of Credit
(a) As security for its obligation to construct the Project in
accordance with the terms of this Agreement and its other
obligations hereunder, SCC shall, on or before the earlier of
June 15, 1999 or commencement of construction of the Sulphur
Terminal, deliver to RTI an irrevocable letter of credit in the
amount of $250,000 which shall be substantially in the form set
forth in Schedule "E". The letter of credit shall have an initial
expiry date of March 15, 2000, however, SCC agrees to renew or
replace the letter of credit from time to time with a letter of
credit(s) on substantially the same terms and conditions until
such time as:
(i) construction of the liquid sulphur ship loading system
(including train unloading and liquid storage) forming part
of the Sulphur Terminal has been completed, and
(ii) the first commercial shipment of sulphur from the Sulphur
Terminal has occurred,
to the satisfaction of RTI, acting reasonably.
(b) If SCC is required under Subsection 6.4(a) to renew or replace a
letter of credit it shall do so at least 20 days prior to the
expiry of such letter of credit and shall immediately deliver to
RTI the renewed or replacement letter of
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credit. If RTI has not received a renewal or replacement letter
of credit at least 20 days prior to the expiry of the letter of
credit then in effect and RTI is of the opinion, acting
reasonably, that one or both of the events referred to in
Subsections 6.4(a)(i) and (ii) will not be completed to the
satisfaction of RTI, acting reasonably, prior to the expiry of
the letter of credit then in effect, RTI shall be entitled to
drawn down in full the letter of credit then in effect prior to
its expiry and to then hold the proceeds of the letter of credit
as security for SCC's obligations under this Agreement.
(c) Upon completion of both of the events referred to in Subsection
6.4(a)(i) and (ii) to the satisfaction of RTI, acting reasonably,
RTI will upon request by SCC take such actions as may be
reasonably requested to cause any then existing letter of credit
issued by SCC to be cancelled.
6.5 Insurance - SCC shall provide, maintain and pay for insurance on the terms
and conditions set forth in the Subleases.
6.6 Builders' Liens - SCC shall at all times keep the RTI Lands and the
Subleased Lands free and clear of all liens, charges and encumbrances whatsoever
including, without limitation, claims of builders' lien which may be filed by
any contractor, subcontractor, supplier or other party in any way contributing
to the Project; SCC shall post, or cause to be posted, on the Subleased Lands at
all times notices satisfactory to RTI and PRPC identifying the site as having
been leased and stipulating that no claim of builders' lien may in any way be
filed against any interest of RTI or SCC in or to such lands. SCC shall
indemnify, defend and save harmless RTI and PRPC from any and all such claims of
builders' lien and the costs, expense and damages in any way deriving therefrom,
whether direct or indirect. SCC shall comply at all times with the requirements
of the Builders' Lien Act with respect to the establishment and maintenance of
holdback accounts and the timing and amount of payments under the construction
contract and shall ensure that its contractor or contractors similarly complies.
RTI and PRPC shall be entitled to post such signs as they reasonably deem
appropriate from time to time so as to alert third parties that they are not
responsible for the cost of any improvements being constructed on the Subleased
Lands. The Sulphur Terminal is not being constructed by SCC at the request of
either RTI or PRPC.
6.7 Site Safety Rules and Regulations - During the course of construction of the
Project SCC shall comply, and will use all reasonable efforts to ensure
compliance by its respective contractors, agents, employees, licensees and
invitees, with the site safety protocols attached hereto as Schedule "F", as
amended from time to time by RTI in its discretion.
6.8 No Interference with RTI Operations. SCC will arrange for all work to be
performed by it or on its behalf in a manner that will not disrupt or interfere
with the ongoing operations of RTI on the RTI Lands.
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6.9 Indemnification- SCC will indemnify and save harmless RTI, its employees and
agents, from and against any and all losses, claims, damages, actions, causes of
action, costs and expenses (including without limitation, legal costs on a
solicitor and his own client basis) that RTI may sustain, incur, suffer or be
put to at any time either before or after the expiration or termination of this
Agreement, where the same or any of them are based upon, arise out of or occur,
directly or indirectly, by reason of any act or omission in whole or in part of
SCC, or of any agent, employee, officer, director, contractor or subcontractor
of SCC, or of any other person for whom SCC is responsible in law, excepting
always liability arising out of the independent acts or omissions of RTI.
7. OWNERSHIP AND MAINTENANCE OF IMPROVEMENTS
7.1 Ownership of SCC Improvements - The ownership of the SCC Improvements shall
be governed by the Subleases.
7.2 Ownership of RTI Improvements - In consideration of $1.00 paid by RTI to
SCC, the grant of rights set forth in Subsection 22.2 of the Operating Agreement
and other valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by SCC), SCC and RTI agree that the RTI Improvements are and shall
be fixtures to the RTI Lands and are intended to be and become the absolute
property of RTI immediately upon their accession to or installation upon the RTI
Lands. To the extent assignable, SCC shall assign to RTI the benefit of any
manufacturers' or other warranties relating to those parts and components which
comprise the RTI Improvements.
7.3 Maintenance of Improvements - In accordance with the terms of the Subleases
SCC shall be responsible for the maintenance of and repair of the SCC
Improvements. At the request of SCC RTI will perform any normal maintenance and
repair in accordance with Section 20 of the Operating Agreement.
8. ASSIGNMENT
8.1 Assignment by SCC. The rights of SCC under this Agreement shall not be
transferred, assigned, sold, mortgaged, sublicensed, sublet or disposed of in
any other manner, in whole or in part, to any other party without in any case
first obtaining the prior written consent of RTI which consent may he withheld
in RTI's sole discretion and there shall be no obligation upon the party
withholding such consent, under any circumstances, to justify the withholding of
its consent. Notwithstanding any such consent being given by RTI and such
transfer, assignment, sale, mortgage, subletting, sublicensing or disposition
being effected, SCC shall remain bound to RTI for the fulfillment of all of its
obligations under this Agreement.
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8.2 Assignment by RTI. RTI may assign its rights and obligations under this
Agreement without the consent of SCC and upon such assignment and the assignee's
agreement to assume all the obligations on the part of RTI under this Agreement,
RTI shall have no liability for any subsequent breach of any obligation on the
part of RTI by the assignee.
8.3 Change of Control of SCC. If SCC is a corporation, the shares of which are
not publicly traded on a stock exchange and if, by the sale or other disposition
of its shares or securities, the control or beneficial ownership of such
corporation is changed at any time after the execution of this Agreement without
the prior written consent of RTI, RTI may, at its option, terminate this
Agreement, the Subleases and the Operating Agreement upon giving fifty (50)
days' notice to SCC of its intention to terminate.
9. LABOUR MATTERS
9.1 Open Site - SCC acknowledges and agrees that the Project is and will be an
"open site" project and that some or all contractors (whether engaged by SCC or
others) and subcontractors working on the RTI Lands or the Subleased Lands may
be union or non-union. SCC shall use all commercially reasonable efforts to
cause its contractors to ensure that labour peace is maintained at all times on
the RTI Lands and the Subleased Lands by its forces and anyone employed by or
through its contractors, and that the Project is carried out without labour
problems, work stoppages or other labour disputes which might affect the Project
or the Coal Terminal.
9.2 Collective Agreement - SCC shall use all commercially reasonable efforts to
ensure that no collective agreement between its contractors and its contractors'
workers, or between subcontractors and their workers, will affect the
contractors' performance under the construction contracts, and further that the
expiry or termination of any such agreement will also not affect the performance
of such construction contracts.
10. DEFAULT AND TERMINATION
10.1 Events of Default - Each of the following will be an event of default by
SCC (an "Event of Default") under this Agreement:
(a) the Project is not completed and fully operational by the required
completion date set out in the Project Timetable or if SCC fails to
satisfy any of the other Project milestones within the time allowed
therefore in the Project Timetable;
(b) SCC commits a material default in the performance of any of its other
obligations under this Agreement and fails to remedy such default
within 30
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days after notice of such default has been given to SCC by RTI of such
default;
(c) an event of default by SCC occurs under either of the Subleases or the
Operating Agreement; or
(d) SCC commits or becomes subject to any one or more of the following
events:
(i) if SCC files a petition in bankruptcy or for re-organization or
for an arrangement pursuant to any applicable bankruptcy law or
under any similar law, now or hereafter in effect, or is adjudged
by a Court of competent jurisdiction a bankrupt or becomes
insolvent or makes an assignment for the benefit of its creditors
or admits in writing its inability to pay its debts generally as
they become due or is dissolved or suspends payments generally of
its obligations;
(ii) if a petition is filed proposing the adjudication of SCC as a
bankrupt or its re-organization pursuant to any applicable
bankruptcy law or any similar law, now or hereafter in effect,
and:
(A) SCC consents to the filing thereof; or
(B) the petition is not discharged or denied within sixty (60)
days after the filing thereof or the petition is not
diligently defended;
(iii) if a receiver, receiver-manager, trustee or liquidator (or other
similar official) is appointed to take charge of SCC or of all
or substantially all of the business or assets of SCC, and:
(A) SCC consents to such appointment; or
(B) the appointment is not discharged or withdrawn or action is
not diligently taken by SCC to secure the discharge of that
official within sixty (60) days after the appointment.
10.2 Remedies - Upon the occurrence of an Event of Default and at any time
thereafter, RTI may:
(a) terminate this Agreement, the Subleases and the Operating Agreement by
written notice to SCC to that effect, effective on a date specified in
such notice, which date shall be not earlier than the date on which
such notice is given;
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(b) call upon the bonds to be delivered by contractors and subcontractors
pursuant to Subsection 6.3 and/or the letter of credit(s) to be
delivered by SCC pursuant to Subsection 6.4; may enter upon the
Subleased Lands and assume control of the execution of the work as
agent of and for the account of SCC; RTI may cause all work to be
undertaken to remedy any delay and to complete the Project, and SCC
shall forthwith on request pay to RTI any and all reasonable direct
costs, charges and expenses of such work undertaken by it;
(c) exercise any other right or remedy available to it, at law or in
equity.
10.3 Right of Termination if Subleases Terminated. If either the Phase I Head
Lease or the Phase I Sublease or the Phase II Head Lease or the Phase II
Sublease is terminated or cancelled or the term of the Phase I Head Lease or the
Phase I Sublease or the Phase II Head Lease or the Phase II Sublease expires and
is not extended, replaced or renewed, RTI may, upon 14 days' written notice to
SCC terminate this Agreement in which case SCC shall not be entitled to any
compensation from RTI.
10.4 Force Majeure Termination - If a party is prevented by a Force Majeure
event from substantially performing its obligations under this Agreement for a
period of 12 or more consecutive months, then the other party shall be entitled
to terminate this Agreement by written notice to that effect to the party so
prevented from performing its obligations.
10.5 Remedies Cumulative and Waivers - No remedy conferred on RTI under this
Agreement is intended to be exclusive. Each and every remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or equity or by statute or otherwise. The exercise
of any one or more remedies shall not preclude the simultaneous or later
exercise by RTI of any or all other such remedies. RTI may by written instrument
waive any breach by SCC of the terms of this Agreement. No course of dealing
between the parties nor any delay in exercising any rights hereunder shall
operate as a waiver of RTI's rights.
11. FORCE MAJEURE
11.1 Definition of "Force Majeure" - In this Agreement "Force Majeure" means an
act of God or the public enemy, acts or refusals to act of any government or
governmental agency in either its sovereign or contractual capacity,
governmental restrictions or control on imports, exports or foreign exchange,
freight embargoes, non-availability or mechanical breakdown or destruction of
equipment vital to loading, forming, storage, transporting or unloading
operations not caused by inadequate maintenance, fire, floods, tidal waves,
earthquake, storm, slides, epidemics, quarantine restrictions, war declared or
undeclared, revolution, riots, insurrections, hostilities, civil disturbances,
strikes, walk-outs, work stoppages, lockouts, railroad obstructions or
obstruction of ocean navigation, stoppages of
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labour, deliberate work slow downs, other labour difficulties, the taking of the
Coal Terminal or Sulphur Terminal by lawful expropriation, other lawful ouster
of RTI or SCC from the Sulphur Terminal or Coal Terminal or other lawful denial
of rights of RTI or SCC or any other cause beyond the reasonable control of a
party, but force majeure shall not include a lack of funds. The non-availability
of labour (other than by reason of strikes and lock-outs) or materials and
hindering subsurface conditions shall not be a cause beyond the control of SCC
or RTI. A party when aware of an event of Force Majeure shall promptly notify
the other party and within 10 days shall notify such other party in writing of
particulars of the relevant event with any supporting evidence. The party
affected by an event of Force Majeure shall use its best efforts to contain or
remove the Force Majeure condition and to resume, with least possible delay,
compliance with its obligations.
11.2 Effect of Force Majeure - If at any time a party hereto is unable to fulfil
its obligations under this Agreement due to an event of Force Majeure, such
party shall be relieved from its obligations for the duration of such event of
Force Majeure.
12. ENUREMENT
12.1 This Agreement and the agreement formed by its acceptance shall enure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
13. ENTIRE AGREEMENT
13.1 There are no covenants, agreements, conditions or representations relating
to the Project, the Subleased Lands or the subject matter of this Agreement
subsisting between the parties hereto, except as expressly set forth or
incorporated in, or contemplated by, this Agreement, the Subleases and the
Operating Agreement or as concurrently or subsequently agreed in writing. All
prior communications, discussions, representations, expressions of interest and,
without limitation, the two letters of intent exchanged between SCC and RTI
dated May 29, 1998 and June 1, 1998 are hereby superseded, cancelled and of no
force or effect whatsoever.
14. CONFIDENTIALITY
14.1 Definition of Confidential Information - In this Agreement "Confidential
Information" means collectively (i) information concerning the business or
affairs of any party, (ii) information concerning the Project or the
transactions contemplated by this Agreement, (iii) negotiations and
communications between the parties or their representatives, (iv) this Agreement
and the agreement formed by their acceptance, and (v)
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all documents, materials, copies and adaptations relating to the foregoing,
excluding in all cases information that is of public record or available to the
public by reason other than disclosure involving breach of confidence or breach
of confidentiality.
14.2 Treatment of Confidential Information - The parties agree as follows:
(a) to use Confidential Information solely for the purpose of carrying out
the purpose and intent of this Agreement and for no other purpose;
(b) to keep all Confidential Information strictly confidential except as
may be required by law, and provided that the parties may disclose
Confidential Information, on a strictly confidential basis, to their
respective officers, agents, employees, consultants, professional
advisors and lenders and, with the consent of the other party hereto,
to third parties, to the extent such disclosure is necessary to carry
out the purpose and intent of this Agreement;
(c) to take all reasonable precautions necessary to prevent any
unauthorized access to or use, disclosure or reproduction of
Confidential Information; and
(d) that all Confidential Information shall, as among the parties hereto,
remain property of the party providing same, and upon termination of
the agreement formed by acceptance of this Agreement and the Subleases
and Operating Agreement (if executed and delivered), each party agrees
to return on request all Confidential Information and all documents
and materials containing Confidential Information provided by any
other parties.
14.3 Release of Confidential Information - If at any time, notwithstanding the
other provisions of this Section 14, either party is obliged by law to release
Confidential Information to third parties then the other party shall be released
from its obligations of confidentiality with respect to that same information
and to the same extent of the disclosure by the party who is obliged by law to
disclose.
15. NOTICES
15.1 All notices and other communications required or permitted hereunder shall
be in writing and either physically delivered or sent by facsimile transmission
(receipt confirmed) to the intended recipient as follows:
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if to RTI: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: General Manager and Chief Operating Officer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
if to SCC: Suite 620, Alberta Stock Exchange Tower
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
or at such other addresses of which either party may from time to time notify
the other in writing. Any notice, approval or other communication so given shall
he deemed to have been given and received on the date on which it is delivered
if delivered and on the day transmitted if confirmed by facsimile.
16. APPLICABLE LAW AND INTERPRETATION
16.1 This Agreement shall be governed by and construed under the laws of the
Province of British Columbia and the laws of Canada applicable therein and the
parties hereto hereby irrevocably attorn to the non-exclusive jurisdiction of
the courts of the Province of British Columbia. The provisions of this Agreement
shall be construed as a whole according to their common meaning and not strictly
for or against RTI or SCC. The plural shall include the singular. The masculine
gender shall include the feminine. The definitions contained in this Agreement
shall also apply to all schedules referred to herein and attached unless
otherwise indicated. Time is of the essence of this Agreement and each of its
provisions. Headings are included for convenience only, and shall have no effect
upon the construction or interpretation of this Agreement or any of the
schedules hereto.
17. PUBLIC ANNOUNCEMENTS
17.1 The parties acknowledge their mutual intention to make one or more public
announcements regarding this Agreement and the proposed Project, notwithstanding
that various details of the Project and its implementation remain to be
developed through the Project Condition removal period. The parties shall use
all reasonable efforts to cooperate and agree upon joint announcements for that
purpose and no party shall make any announcement independently of the others
without first notifying them at least 48 hours in advance.
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18. COUNTERPARTS
18.1 This Agreement may be executed in any number of counterparts and delivered
by facsimile, each of which counterparts shall together, for all purposes,
constitute one and the same instrument, binding on the parties, and each of
which shall together be deemed to be an original, notwithstanding that all of
the parties are not signatory to the same counterpart or facsimile.
19. DISPUTE RESOLUTION
19.1 Arbitration - If any dispute arising out of or in connection with this
Agreement cannot be resolved through negotiation between the parties, the
dispute shall be submitted to arbitration in accordance with this Subsection. If
within 30 days after either party gives notice to the other of a dispute the
parties agree upon a single arbitrator, the arbitration will be held before such
arbitrator; otherwise, the arbitration shall be before a board of three
arbitrators comprising one appointed by RTT, one appointed by SCC, and one
appointed by the two arbitrators so appointed. If RT1 and SCC shall, after 14
days' notice, fail to appoint such arbitrator, or if the two arbitrators fail to
appoint a third arbitrator within 14 days' from their own appointment, then upon
application by either party, the arbitrator or third arbitrator, as the case may
be, shall be selected in the manner provided in the Commercial Arbitration Act
(Canada). 'Me provisions of this Subsection 19.1 shall be deemed to be a
"submission" to arbitration within the provisions of the Commercial Arbitration
Act (Canada). The parties to this Agreement agree that the rules of the British
Columbia International Commercial Arbitration Centre for the conduct of domestic
commercial Arbitrations shall not apply to such arbitration. The decision of the
arbitrator (where a single arbitrator has been agreed upon) or a majority of the
arbitrators (where three arbitrators have been appointed) shall be final and
binding on the parties. The arbitrator(s) shall be required to render his, her
or their decision within 60 days of the conclusion of the arbitration
proceedings.
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19.2 Venue - Any arbitrations shall be conducted in Vancouver, British Columbia
unless otherwise agreed to.
IN WITNESS WHEREOF the parties have executed this Agreement as
of the date set out on the first page of this Agreement.
▇▇▇▇▇▇ TERMINALS INC.
By:
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Authorized Signatory
By:
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Authorized Signatory
SULPHUR CORPORATION OF CANADA LTD.
By:
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Authorized Signatory
By:
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Authorized Signatory
