EXHIBIT 10.4
EQUIPMENT PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of August, 1997, by and
between XXXXXXX INTERNATIONAL, INC., an Idaho corporation, ("FII") and ATLAS
MINING COMPANY, an Idaho corporation ("Buyer");
WHEREAS, FII owns equipment used in providing underground mining and
related civil construction contract services in the state of Idaho and
throughout the western United States; and
WHEREAS, Seller desires to sell and Buyer desires to purchase from Seller
all of the mining equipment, drills, loaders, trucks, tools, vehicles and
supplies upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for the other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties do hereby mutually
agree as follows:
Agreement to Sell and to Buy. Seller, for itself and its respective
successors, legal representatives and assigns, hereby agrees to sell
to Buyer and Buyer, for itself and its successors, legal
representatives and assigns, hereby agrees to purchase from Seller,
for the consideration set forth in Section 2 hereof, all of Seller's
rights, title and interests in and to the property listed in Exhibit
B, attached hereto. Seller warrants that the specified assets are free
from all liabilities and encumbrances, except for the secured
interests of Washington Trust Bank and Orix Credit Alliance as
described in Exhibit A, attached hereto. Buyer is not assuming any
underlying debts in a timely and orderly manner.
Purchase Price and Method of Payment. Subject to the adjustments
Hereinafter specified, the total purchase price is One Million Four
Hundred Sixteen Thousand Ninety-Four Dollars ($1,416,094.00) and is
payable by the Buyer as follows:
Twenty-five Thousand Dollars ($25,000) upon signing of this agreement,
the receipt of which is hereby acknowleged as xxxxxxx money in
partial payment of the purchase price for said assets; and
The additional sum of Twenty-five Thousand Dollars ($25,000), plus
Three Hundred Fifty Thousand Dollars ($350,000) of Atlas Mining
Company Stock issued at the bid price as of the date of this
agreement to FII, on or before the closing date of this
agreement; and
The balance of the purchase price shall be evidenced by a promissory
Note payable to Seller which provides for payment principal in the
amount of One Million Sixteen Thousand Ninety-Four Dollars
($1,016,094) payable according to the following schedule.
During the first 12 months of the term of the note, payments will
be $15,000, payable monthly beginning thirty days after
Closing Date. Interest will accrue at the rate of eight and
three quarters percent (8.75%) per annum.
Should Buyer sell or refinance equipment on Exhibit A (now
financed by Washington Trust or Orix Credit), then Buyer
will pay the additional principal payment of the sale or
refinance proceeds directly to the Creditor herein and
Seller will reduce balance of the promissory note in the
amount equal to that paid by the Buyer directly to the
creditor.
At the end of One Year after Closing Date the Buyer shall: Pay the
outstanding principal and accrued interest in one lump payment; or Refinance the
outstanding balance of principal and accrued interest with another lender; or If
after pursuing both SBA and commercial financing for the purpose of refinancing
the outstanding balance of principal and accrued interest the Buyer is unable to
obtain financing the Buyer shall have the option of refinancing with the Seller
the outstanding balance for additional periods of 30 month or 42 month periods,
and for periods of one year thereafter. The terms of the notes shall be of a
maximum 7 year amortization and annual percentage rate no more than the
Washington Trust Bank prime rate + .75%.
The Buyer has the right to prepay the note without penalty.
The Buyer agrees that all of the equipment listed on Exhibit B
shall be subject to uniform commercial code security interests
and/or motor vehicle title liens in favor of the Seller to
secure payment of the amount due under the promissory note.
All security interests shall be released by the Seller when
the note is satisfied.
Buyer agrees the duty of Seller to consummate this sale is expressly
contingent upon the approval of the terms hereof by Washington
Trust Bank and Orix Credit Alliance on or prior to the Closing
Date.
Liabilities Not Assumed. This agreement is intended by the parties to be
for the sale of equipment only. It is expressly understood and agreed
that Buyer shall not assume any liability or obligations of any
nature, financial or otherwise, pertaining to the conduct of the
business by Seller prior to the date of closing or the ownership by
Seller of the assets sold to Buyer hereunder.
Closing. It is hereby agreed that this matter shall be closed at the
office of HULL, XXXXXXXXXXX & SIMPSON, Wallace, Idaho. All funds and
instruments necessary to complete the sale and create the contemplated
security interests will be deposited with them. The Closing Date shall
be ______________, 1997, unless an earlier date is mutually agreed
upon.
Documents to be Delivered by Seller at Closing. At Closing, Seller Shall
deliver to Buyer, in form and substance satisfactory to Buyer in each
case:
Certified copies of resolutions duly adopted by the Board of Directors
and ratification of shareholders of FII approving the
transactions referred to herein and authorizing and directing the
execution of this Agreement and the performance of all
obligations hereunder;
Fullyexecuted Bills of Sale and Assignment with full warranties of
title (except as otherwise shown on Exhibit A hereto)
transferring to Buyer all of Seller's interests of every kind and
nature in and to all equipment and supplies as listed in Exhibit
B;
All other documents or instruments which Buyer may reasonably require
to assure full and effective transfer to Buyer of all of Seller's
property transferred to Buyer pursuant to the terms of this
agreement.
Seller agrees to give the Board of Directors of Atlas Mining Company
voting rights to the stock issued by Atlas as partial payment
herein, said proxy to be nonrevocable for the term of this
agreement or extensions thereof.
Documents to be Delivered by Buyer at Closing. At Closing, Buyer shall
deliver to Seller, in form and substance satisfactory to Seller
in each case;
Payment in full of that portion of the consideration payable on the
Date of Closing as specified in Section 2;
Duly executed promissory note purchase money security agreement and
uniform commercial code filing instrument covering assets
purchased in the amount and payable in the manner specified in
Section 2;
Certified copies of resolutions duly adopted by Buyer's Board of
Directors approving the transactions referred to herein and
authorizing and directing the execution of this Agreement and the
performance of all obligations hereunder;
Such other documents as may be reasonably requested by Seller in order
to complete the transaction contemplated hereby.
Possession. Seller shall deliver to Buyer, and Buyer shall take delivery
of, property to Seller being purchased and sold hereunder on the Date
of Closing.
Seller's Covenant, Representations, and Warranties. As an inducement to
Buyer to enter into this Agreement, Seller for itself and its
respective representatives, successors and assigns, jointly and
severally covenant, represent and warrant to Buyer as follows:
The Seller is now, and on the Date of Closing will be, a corporation duly
organized and in good standing under the laws of the State of Idaho, with the
power to own, sell and transfer its assets, inventory and properties pursuant
to this Agreement;
The execution, delivery and performance by the Seller of this Agreement, and
each other instrument or agreement contemplated by this agreement, are within
the corporate powers of the Seller, have been duly authorized by all
necessary corporate action on the part of the Seller (including shareholder
approval of transactions or documents contemplated by this Agreement with
respect to which shareholder approval is required by law or each of the
Seller's governing instruments), and will not violate or constitute a default
under any provision of law or of the Articles of Incorporation, By-Laws, or
other contractual obligation of the Seller. This Agreement, together with all
other instruments or agreements contemplated hereunder, when duly executed
and delivered, will be the legal, valid and binding obligation of the Seller
and its heirs or assigns, and is enforceable against the Seller in accordance
with their respective terms;
Except as specified in Exhibit A, Seller has good and marketable title to their
respective assets sold hereunder. On the Date of Closing all tangible
personal property purchased hereunder shall be in as good order and condition
as on the date of this Agreement, ordinary wear and tear excepted;
The Seller is not a party to or by any agreement or instrument or subject to any
charter or corporate resolution or any order, injunction or decree of any
court or governmental agency affecting the properties being purchased by
Buyer hereunder;
Except to the extent otherwise specifically agreed upon under the terms of this
Agreement, the risk of loss of the properties purchased by the Buyer
Hereunder shall remain with Seller until the Closing, at which time such risk
shall become that of the Buyer.
Buyer's Covenants, Representations and Warranties. As an inducement to
Seller to enter into this Agreement, Buyer covenants, represents and
warrants to Seller that:
Buyer is now, and on the Date of Closing will be, a corporation duly organized,
Validly existing and in good standing under the laws of the State of Idaho,
with power to own, purchase and acquire Seller's assets pursuant to this
Agreement; The execution, delivery and performance by Buyer of this
Agreement, and each other instrument or agreement contemplated by the
Agreement, are within the corporate powers of Buyer, have been duly
authorized by all necessary corporate action on the part of Buyer and will
not violate or constitute default under any provision of the Articles of
Incorporation, Bylaws or any other contractual obligation of Buyer. This
Agreement, together with all other instruments or agreements contemplated
hereunder, when duly executed and delivered, will be the legal, valid and
binding obligation of Buyer, and will be enforceable against Buyer in
accordance with their respective terms.
From and after the time of closing Buyer agrees to continually insure the
equipment subject to this agreement in the amount equal to the amount owed
FII from time to time. Buyer further agrees to name FII as an additional
Insured on such theft and casualty policy and with indemnification paying all
proceeds of claims directly to FII or its assigns.
10. Conditions to Obligation of Buyer. The obligations of Buyer under this
Agreement are expressly conditioned upon satisfaction of the following
conditions as of the Date of Closing:
All the terms, covenants and conditions of this Agreement to be compiled with
and performed by the Seller on or before the Date of Closing shall have been
fully complied with and performed in all material respects;
Seller shall have afforded to the officers and authorized representatives of
Buyer free and full access to the equipment and supplies of Seller prior to the
Date of Closing in order that Buyer shall have full opportunity to make such
inspections of the assets being purchased hereunder and such other
investigations as it shall desire, including the right of Buyer to have an
independent outside appraisal of the assets in Exhibit B, and Seller shall have
furnished Buyer with such additional financial and operating data and other
information as to the maintenance operation of Seller's assets which Buyer shall
from time to time have reasonably requested prior to the Date of Closing.
11. Brokerage. Seller and Buyer warrant and represent to each other that
there is no brokerage or finder's fee payable to any party in
connection with the sale o the assets, inventory, and properties
provided for in this Agreement.
12. Assignment. Prior to the Date of Closing, Buyer may at its option
assign its interests under this Agreement to a third party without the
prior consent of Seller. Seller may at its option assign its interests
under this agreement to a third party without the prior written
consent of Buyer.
13. Miscellaneous.
All covenants, agreements, representations and warranties contained
herein Shall survive the execution of this Agreement and the Date of
Closing hereunder;
The parties shall execute and deliver such other and further documents
as may be necessary to implement and consummate this Agreement; This
Agreement shall be binding upon and inure to the benefit and be
enforceable against the parties hereto and their
respective successors and assigns, and shall in all
respects be governed, enforced and interpreted in
accordance with the laws of the State of Idaho;
Attorney for the Seller is Xxx Xxxxxxx, Xxxx Xxxxxxxxxxx & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000. Each party acknowledges the
right of the other to have any and all documents reviewed by their
respective representative.
All notices, demands and requests required or permitted to be given
hereunder shall be deemed duly given if and when mailed by certified
or registered mail, postage prepaid, and, pending the designation in
writing of another address, addressed to Seller as follows:
Xxxxxxx International, Inc.
0000 X. Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
and addressed as follows:
Atlas Mining Company
X.X. Xxx 000
Xxxxxx, XX 00000
(f) This Agreement and the Exhibits attached hereto contain the entire
agreement between the parties, superseding in all respects any and all
prior oral or written agreements or understandings, between the
parties hereto pertaining to the sale of Seller's equipment purchased
and sold hereunder, and shall be amended or modified only by written
instrument signed by both parties hereto. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one
agreement.
IN WITNESS WHEREOF, each of the parties hereto executed this Agreement on
the day and year first above written.
SELLER: Xxxxxxx International, Inc.
By: _________________________
Its: ________________________
Date: _______________________
BUYER: Atlas Mining Company
By: _________________________
Its: ________________________
Date: _______________________
EXHIBIT "A"
EQUIPMENT: All equipment of Debtor now owned or hereafter acquired including,
but not limited to mining equipment and machinery, together with all parts,
fittings, and accessions at anytime acquired, wherever located.
INVENTORY: All inventory of debtor now owned or hereafter acquired, including,
but not limited to, raw materials, work in process, finished goods and materials
and supplies used or consumed in debtor's business including, but not limited to
drill bits, drill shafts and other consumable mining inventory whether in the
possession of the debtor, warehouseman, bailee, or any other person or wherever
located, and all proceeds and products of debtor's inventory in any form.
CASH AND DEPOSIT ACCOUNTS: All cash and deposit accounts in any form excluding
payroll and tax reserve accounts.
DATED this 11th day of October, 1989.
Xxxxxxx International, Inc.
By:________________________________
President
By:________________________________
Treasurer
Washington Trust Bank
By:_________________________________
Vice President
XXXXXXX INTERNATIONAL, INC.
XXXXXXX MINE SERVICES, INC.
Exhibit A
ACCOUNTS: All accounts, chattel paper, contracts and contract receivables,
instruments, documents or other writing evidencing a monetary obligation, all
other rights to payments, including, but not limited to, all general intangibles
evidencing or comprising a right to receive payment, including all city, county,
state and federal tax refunds or other receivables due from such sources now or
at anytime hereafter existing whether or not earned by performance arising out
of the conduct of the Debtor's business together with all rights, titles,
security and guaranties of each account including any right to stop in transit
and all security interest, claims and pledges whether voluntary or involuntary
which are pertinent to or affect such accounts and all returned or repossessed
goods sold in inventory. All accounts, chattel paper, instruments general
intangibles, and rights to payment of every kind, now or hereafter owing to
Debtor including but not limited to that certain contract between Debtor and
Pegasus Gold Corporation dated 24th day of June, 1994.
CASH AND DEPOSIT ACCOUNTS: All cash deposit accounts in any form excluding
payroll and tax reserve accounts.
GENERAL INTANGIBLES: All general intangibles (as defined in Article 9 of the
Uniform Commercial Code) now owned or hereafter acquired, together with all
renewals, replacements and/or substitutions therefore or additions thereto, all
rights accruing therefrom and all proceeds thereof.
XXXXXXX INTERNATIONAL, INC.
By:_______________________________
By:_______________________________
XXXXXXX MINE SERVICES, INC.
By:_______________________________
By:_______________________________
EXHIBIT "A"
EQUIPMENT: All equipment of Debtor now owned or hereafter acquired including,
but not limited to mining equipment and machinery, together with all parts,
fittings, and accessions at anytime acquired, wherever located.
INVENTORY: All inventory of debtor now owned or hereafter acquired, including,
but not limited to, raw materials, work in process, finished goods and materials
and supplies used or consumed in debtor's business including, but not limited to
drill bits, drill shafts and other consumable mining inventory whether in the
possession of the debtor, warehouseman, bailee, or any other person or wherever
located, and all proceeds and products of debtor's inventory in any form.
CASH AND DEPOSIT ACCOUNTS: All cash and deposit accounts in any form excluding
payroll and tax reserve accounts.
DATED this 11th day of October, 1989.
Xxxxxxx International, Inc.
By:________________________________
President
By:________________________________
Treasurer
Washington Trust Bank
By:_________________________________
Vice President
XXXXXXX INTERNATIONAL, INC.
XXXXXXX MINE SERVICES, INC.
Exhibit A
ACCOUNTS: All accounts, chattel paper, contracts and contract receivables,
instruments, documents or other writing evidencing a monetary obligation, all
other rights to payments, including, but not limited to, all general intangibles
evidencing or comprising a right to receive payment, including all city, county,
state and federal tax refunds or other receivables due from such sources now or
at anytime hereafter existing whether or not earned by performance arising out
of the conduct of the Debtor's business together with all rights, titles,
security and guaranties of each account including any right to stop in transit
and all security interest, claims and pledges whether voluntary or involuntary
which are pertinent to or affect such accounts and all returned or repossessed
goods sold in inventory. All accounts, chattel paper, instruments general
intangibles, and rights to payment of every kind, now or hereafter owing to
Debtor including but not limited to that certain contract between Debtor and
Pegasus Gold Corporation dated 24th day of June, 1994.
CASH AND DEPOSIT ACCOUNTS: All cash deposit accounts in any form excluding
payroll and tax reserve accounts.
GENERAL INTANGIBLES: All general intangibles (as defined in Article 9 of the
Uniform Commercial Code) now owned or hereafter acquired, together with all
renewals, replacements and/or substitutions therefore or additions thereto, all
rights accruing therefrom and all proceeds thereof.
XXXXXXX INTERNATIONAL, INC.
By:_______________________________
By:_______________________________
XXXXXXX MINE SERVICES, INC.
By:_______________________________
By:_______________________________
ADDENDUM TO PURCHASE AGREEMENT
DATED AUGUST 22, 1997
This is to modify the maturity date of the Equipment Purchase Agreement of
August 22, 1998, between Xxxxxxx International, Inc. and Atlas Mining Company.
It is mutually agreed that the date of maturity of this agreement be extended to
August 22, 2002. It is mutually agreed that the maturity of the Promissory Note
dated September 30, 1997, negotiated in conjunction with the Equipment Purchase
Agreement also be extended to August 22, 2002.
Signed this ___ day of December, 1998.
---------------------------------
For Xxxxxxx International, Inc.
