EXHIBIT 99.1
COMMODITY PURCHASE AGREEMENT
This Commodity Purchase Agreement ("Agreement") is made by and between
F T Leasing & Financial, Inc., a Colorado corporation ("Purchaser"), whose
principal place of business is located at 0000 Xxxxxxxx Xx., Xxxxxxxx, Xxxxxxxx
(and its assigns) and Geotec Thermal Generators, Inc. (the "Company"), a Florida
corporation that maintains its principal place of business at 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000, and is effective as of the last date
of execution set forth below.
WHEREAS, the Company desires to sell over a three-year period, a
minimum of two million tons of mined coal annually to Purchaser, subject to and
in accordance with the terms and conditions hereof; and
WHEREAS, the Purchaser desires to purchase coal from the Company for
consideration described herein, subject to and in accordance of the terms
hereof; and
NOW THEREFORE, in exchange for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and the mutual
covenants, considerations, conditions hereinafter set forth, the Purchaser and
Company hereby agree as follows:
1. COMMODITY PURCHASED
Pursuant to this Agreement ("Agreement") the Company agrees to sell to
Purchaser on an annual basis (subject to the renewal periods and provisions set
forth herein) a minimum of two million (2,000,000) tons of mined coal (the
"Coal") located on the land described as 00000 Xxxx Xxxxx Xxxx, Xxxx, Xxxxxxxx
00000 (the "Arrow Road Site") and more specifically defined in the Xxxx Xxxxxxx
and Associates Survey with specific legal descriptions attached. The quality and
characteristics of the Coal shall be the same as described in the aforementioned
Xxxx Xxxxxxx and Associates Survey.
2. TERM OF AGREEMENT
This Agreement shall be for a period of one (1) year commencing on July
1, 2005. Unless cancelled by either Party in accordance with its terms, this
Agreement shall automatically renew for successive one (1) year periods on July
1, 2006 and July 1, 2007.
3. CONSIDERATION
a. As consideration for each shipment and sale of the Coal during the
first year of this Agreement, Purchaser agrees to tender to the Company the
geographical market "Spot" price (currently thirty-six dollars ($36.00)) per ton
for a total price of US$72,000,000.00 for the first year of the Agreement,
payable through the US$25,000,000.00 revolving line of credit described in
paragraph b. below. During each successive year of this Agreement, Purchaser
agrees to tender the then prevailing geographical market Spot price minus two
dollars ($2.00) per ton for Coal purchased from the Company. Purchaser
acknowledges that the market Spot price per ton of coal
1
fluctuates from time to time and agrees that the price per ton of the Coal under
the terms of this Agreement shall likewise fluctuate with prevailing market
rates.
b. In order to secure payment to the Company for each shipment of Coal,
Purchaser agrees to procure and have issued a revolving documentary letter of
credit (the "Letter of Credit") in substantially the same form as Exhibit "1"
attached to this Agreement. The Company shall be identified as the beneficiary
of the Letter of Credit. Purchaser agrees that the Letter of Credit shall be for
the amount of $25,000,000.00 and at the beginning of each one hundred twenty day
revolving period, the Letter of Credit shall be renewed for the above amount.
The Letter of Credit shall be irrevocable and its term shall coincide with the
term of this Agreement until all sums due and owing to the Company are paid in
full. The Letter of Credit shall be subject to the Uniform Customs and Practice
for Documentary Credits, International Chamber of Commerce Publication 500.
Other terms of the Letter of Credit shall be consistent with the terms appearing
in Exhibit 1.
4. DELIVERY
Purchaser shall identify as to each shipment of Coal, the location of
the railroad head and/or river barge loading site (the "Delivery Site") nearest
to the Arrow Road Site where Purchaser desires to have the Coal delivered by the
Company. Transfer of ownership of the Coal under the terms of this Agreement and
for purposes of transferring funds from Purchaser to the Company pursuant to the
Letter of Credit shall be deemed complete upon deposit of the Coal at the
Delivery Site and receipt by the Company of a xxxx of lading for the Coal.
5. PURCHASER REPRESENTATIONS AND WARRANTIES
In order to induce the Company to offer and sell the Coal the Purchaser
represents and warrants to the Company, as follows:
a. Purchaser Status; Capitalization. The Purchaser is a corporation
incorporated and validly existing in good standing under the laws of the State
of Colorado and has all requisite power and authority to own its assets and to
conduct its business as now conducted.
b. Valid and Binding Obligation of Purchaser. The Purchaser's
execution, delivery, and performance of this Agreement have been authorized by
all requisite corporate action of the Purchaser, will not conflict with its
bylaws or articles of incorporation, and will not constitute a breach or
violation of, or a default under, any material lease, contract, agreement,
instrument, indenture, or mortgage to which the Purchaser is a party or to which
any significant part of its property is subject. This Agreement is a valid and
binding obligation of the Purchaser.
c. Release and Hold Harmless. Purchaser hereby releases, acquits and
hold harmless the Company and its officers, directors, employees, agents,
servants and those acting in concert or participation with them from any and all
matters having to do with the sale of the Coal and, further, covenants not to
xxx the Company and its officers, directors, employees, agents, servants and
those acting in concert or participation with them with respect to any matters
relating to the sale of the Coal.
2
d. Assumption of Liabilities Relating to the Coal. Purchaser agrees
that upon delivery of the Coal by the Company, Purchaser shall assume any and
all liabilities and contingent liabilities arising from or in any way relating
to the Coal. Purchaser acknowledges that the Company specifically rejects
retention of any liabilities relating to the Coal.
e. Indemnification of the Company. The Purchaser agrees to indemnify
the Company against any and all losses, claims, damages, liabilities and
expenses, (including, without limitation, reasonable attorneys' fees and
expenses) incurred by the Company arising out of, in any way connected with, or
as a result of (i) the Company's sale of the Coal or (ii) the construction or
operation of any facility owned or operated by the Purchaser or any affiliate in
connection with Purchaser's processing or resale of the Coal, or resulting from
any pollution or other environmental condition arising from Purchaser's
acquisition of the Coal; (iii) enforcement of this Agreement, or the performance
by the Parties of their obligations under this Agreement; and (iv) any claim,
litigation, investigation or proceedings related to any of the foregoing,
whether or not the Company is a party thereto.
6. COMPANY REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to Purchaser the following:
a. Company Status. The Company is a corporation incorporated and
validly existing in good standing under the laws of the State of Florida and has
all requisite power and authority to own its assets and to conduct its business
as now conducted.
b. Valid and Binding Obligation of Company. The Company's execution,
delivery, and performance of this Agreement have been authorized by all
requisite corporate action of the Company. This Agreement is a valid and binding
obligation of the Company.
7. JURISDICTION AND VENUE
This Agreement shall be governed by and construed solely and
exclusively in accordance with the laws of the state of Florida without regard
to any statutory or common-law provision pertaining to conflicts of laws. The
Parties agree that courts of competent jurisdiction in Palm Beach County,
Florida and the United States District Court for the Southern District of
Florida shall have concurrent jurisdiction with the arbitration tribunals of the
American Arbitration Association for purposes of entering temporary, preliminary
and permanent injunctive relief with regard to any action arising out of any
breach or alleged breach of this Agreement. The Parties agree to submit to the
personal jurisdiction of such courts and any other applicable court within the
state of Florida. The Purchaser further agrees that the mailing of any process
shall constitute valid and lawful process against the Purchaser. The Purchaser
waives any claim that the Purchaser may have that any of the foregoing courts is
an inconvenient forum.
8. ARBITRATION AGREEMENT
The Parties agree that all controversies, claims, disputes and matters
in question arising out of, or related to, this Agreement, the breach of this
Agreement, the purchase of the Company's Securities pursuant to this Agreement
or any other matter or claim whatsoever shall
3
be decided by binding arbitration before the American Arbitration Association,
utilizing its Commercial Rules. Venue for any arbitration between the Parties
shall be had and is mandatory in Xxxx Xxxx Xxxxx, Xxxx Xxxxx Xxxxxx, Xxxxxxx to
the exclusion of all other places of venue, for all matters that arise under
this Agreement.
9. TERMINATION
a. Termination of Agreement. The Parties may terminate this Agreement
as provided below:
(i) Purchaser and the Company may terminate this Agreement by
mutual written consent at any time;
(ii) The Company may terminate this Agreement by giving
written notice to Purchaser at any time in the event Purchaser has breached any
representation, warranty or covenant contained in this Agreement; or in the
event that the Company determines, in its sole discretion, that it can make a
better or more profitable use of the Coal.
b. Effect of Termination. If this Agreement is terminated pursuant to
this Section, all rights and obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party. No termination
of this Agreement shall relieve any party for its breach or violation of this
Agreement.
10. MISCELLANEOUS PROVISIONS
a. Notices. Any notice required or provided for in this Agreement to be
given to any party shall be mailed certified mail, return receipt requested, or
hand delivered, to the party at the address set forth in the preamble.
b. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties.
c. Construction. The section headings, captions, or abbreviations are
used for convenience only and shall not be resorted to for interpretation of
this Agreement. Wherever the context so requires, the masculine shall refer to
the feminine, the singular shall refer to the plural, and vice versa.
d. Fees. In the event that any party is required to engage the services
of legal counsel to enforce its rights under this Agreement against any other
party, regardless of whether such action results in litigation, the prevailing
party shall be entitled to reasonable attorneys' fees and costs from the other
party, which in the event of litigation shall include fees and costs incurred at
trial and on appeal.
e. Entire Agreement. This Agreement contains the entire understanding
among the parties and supersedes any prior written or oral agreement between
them respecting the subject matter of this Agreement. There are no
representations, agreements, arrangements, or understandings, oral or written,
between the parties hereto relating to the subject matter of this Agreement that
are not fully expressed herein.
4
f. Amendments. Any amendments to this Agreement shall be in writing
signed by all parties.
g. Severability. In case any one or more provisions contained in this
Agreement shall, for any reason, be held invalid illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had not been contained herein.
h. Assignment. This Agreement is assignable by the Parties with ten
days written notice by one Party to the other Party.
i. Waiver. No consent or waiver, expressed or implied, by a party of
any breach or default by any other party in the performance by that other party
of its obligations hereunder shall be deemed or construed to be a consent or
waiver to any other breach or default in the performance by such other party of
the same or any other obligations of such other party hereunder. Failure on the
art of any party to complain of any act or failure to act of another party or to
declare that other party in default, irrespective of how long such failure
continues, shall not constitute a waiver of such party of its rights hereunder.
j. Counterparts. This agreement may be executed in multiple
counterparts each of which shall be deemed an original for all purposes.
k. Survival of Representations and Warranties. The representations and
warranties set forth in this Agreement shall be continuing and shall survive the
execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below.
DATE: June 10, 2005 F T LEASING & FINANCIAL, INC.
/s/ XXXX XXXXXXXX
-------------------------------
XXXX XXXXXXXX, PRESIDENT
DATE: June 10, 2005 GEOTEC THERMAL GENERATORS, INC.
/s/ XXXXXXX X. XXX
-------------------------------
XXXXXXX X. XXX,
CHAIRMAN OF THE BOARD
5
