EXHIBIT 10.1
PROCESSING AGREEMENT
THIS PROCESSING AGREEMENT (the "Agreement") is made, entered into, and
effective as of the 14 th day of July, 2004 (the "Effective Date") by and
between Oretech, Inc, a Nevada Corporation ("ORTE"), and STRONG OX, LLC, a
Nevada Limited Liability Company (referred "the Client").
RECITALS
WHEREAS, ORTE has a license to a proprietary method of processing
bottom ash ("Material") that yields precious metals and other products of value;
WHEREAS, the Client has a quantity of Material that it desires to be
processed using such proprietary method;
WHEREAS, ORTE and the Client desire to share the revenues resulting
from the distribution, marketing and sale of such precious metals and other
products of value that result from the processing,
NOW, THEREFORE, in consideration of the foregoing and other covenants
and agreements and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement, each of the following
capitalized terms shall have the meaning set forth in this Article:
"ACCOUNTANTS" has the meaning ascribed to such term in Section 2.3.
"ACQUISITION TRANSACTION" has the meaning ascribed to such term in
Section 5.2(d).
"AGREEMENT" means this Processing Agreement.
"CAPACITY REQUIREMENTS" has the meaning ascribed to such term in
Section 3.1.
"CHANGE IN CONTROL" has the meaning ascribed to such term in Section
5.2(d).
"COMMITTEE REPRESENTATIVE" has the meaning ascribed to such term in
Section 7.1.
"CONFIDENTIAL INFORMATION" means any data or information, as noted in
the provisions of the executed Non-Disclosure Agreement attached as an exhibit
to this Agreement.
"DISPUTE" has the meaning ascribed to such term in Section 8.1.
"EFFECTIVE DATE" has the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"GOVERNMENTAL REQUIREMENT" means any applicable law, rule, ordinance,
regulation or other requirement having the effect of law, of any federal, state
or local court, government, department, commission, board, agency, official or
other regulatory, administrative or governmental authority.
"GROSS YIELD" means, as to any given period of time, the value, in
dollars, of the total amount of marketable metal produced during such period
pursuant to this Agreement, using a valuation formula based upon a five-day
trailing average North American Market spot price.
"MATERIAL" refers to bottom ash waste supplied by the Client.
"METALOR" has the meaning ascribed to such term in Section 4.4.
"NET YIELDS" has the meaning ascribed to such term in Section 2.1.
"NOTICE OF DISPUTE" has the meaning ascribed to such term in Section
8.2.
"OVERSIGHT COMMITTEE" has the meaning ascribed to such term in Section
7.1.
"PROCESS" or "PROCESSING" or "PROCESSED" means the formulation, process
and procedures involved in processing the Products in accordance with the
Specifications.
"PRODUCT DOCUMENTS" means all information, including without limitation
laboratory data, production records, analyses results, and all other documents
relating to the Products.
"PRODUCT" has the meaning ascribed to such term in Section 4.1.
"QUALITY STANDARDS" has the meaning ascribed to such term in Section
3.1.
"SPECIFICATIONS" has the meaning ascribed to such term in Section
4.3.
"TRADE SECRETS" means any information of either party, including but
not limited to technical or non-technical data, a formula, a pattern, a
compilation, a software program (including object and source code), a device, a
method, a technique, a drawing, a process, financial data, financial plans,
deliverable plans, or a list of actual or potential customers or suppliers,
which (i) derives economic value, actual or potential, from not being generally
known to and not being readily ascertainable by proper means by other persons
who can obtain economic value from its disclosure or use and (ii) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy.
Trade Secrets also include any information described in this paragraph which
either party obtains from another party which such party treats as proprietary
or designates as trade secrets.
1.2 OTHER CAPITALIZED TERMS. Capitalized terms used in this Agreement
but not defined in this Article I shall have the meanings ascribed to such terms
where they are defined in this Agreement.
ARTICLE II
CONSIDERATION
2.1 PROCESSING PAYMENT AND PERCENTAGE OF YIELD. ORTE shall receive
consideration for processing of the Client's Material on the following basis:
2.1.a The total cost of shipping and handling of Material to ORTE's
Facility will be the responsibility of a mutually agreed upon third party for
the first three hundred (300) tons of Material to be processed. After this
initial quantity of 300 tons, the cost of shipping Material to ORTE shall be
considered a part of the fee structure as noted in 2.1.b.
2.1.b Material received by ORTE will be processed at a cost per ton to
be deducted from the Gross Yield (the "Processing Fee"). This Processing Fee
will include the cost of concentrating, shipping (after the first 300 tons),
handling, processing, storing, disposal of processing waste, refining by
Metalor, and all related marketing and distribution expenses associated with the
Product as further detailed in Schedule 4.0. The value of Products recovered
from this process will then be split on a Percentage of Yield, which will
include 12% for the Client and 88% for ORTE. This Percentage of Yield will be
remitted to the Client after ORTE has deducted its Processing Fee from the Gross
Yield.
Specifically, as an example, assuming a 4:1 concentration
ratio, if the value of Products recovered is $1400.00, and a Processing
Fee of $400.00 is incurred, then the remaining Net Yield of $1000.00
will be split $120 to SOL, and $880 to ORTE.
2.2 On a monthly basis, the parties shall mutually determine the Gross
Yield for Product processed hereunder during such month, and ORTE shall be paid,
out of the Gross Yield recovered, a Processing Fee per ton of Material
processed. The remaining value of precious metals, the "Net Yield", recovered
shall be split, twelve percent (12%) for the Client and eighty-eight percent
(88%) for ORTE each month. The actual payment of Processing Fees and Net Yield
will be disbursed one month after the closing of each monthly period to allow
for processing and settlement from Metalor or whatever is deemed as an
acceptable timeline for all parties.
2.3 The Parties shall each select representatives within their
respective organizations, whose responsibilities will include tracking and
auditing monthly Materials processing and respective Gross and Net Yields. These
representatives will comprise the Oversight Committee as noted in (Section 7.1)
Pending approval by the Oversight Committee, monthly payments due hereunder
shall be paid at the end of each month and shall include a certification of the
calculations used in determining the amount of the payment. In the event that
either party disputes the calculation of Net Yield, and such dispute cannot be
settled after a good faith attempt by the parties to do so, then the dispute
shall be submitted to an independent nationally recognized accounting firm
acceptable to both parties (the "Accountants"). In connection therewith, each
party shall furnish, or cause to be furnished, to the Accountants such work
papers and other documents and information relating to the disputed issues as
the Accountants may request and as are available to the party or its agents.
Further, each party shall be afforded the opportunity to present to the
Accountants any material relating to the disputed issues and to discuss the
issues with the Accountants. The determination by the Accountants, as set forth
in a written notice to be delivered to both parties within sixty (60) days of
the submission to the Accountants of the disputed issues, shall be reviewed and
if acceptable to both the Client and ORTE representatives of the Oversight
Committee shall be final, binding and conclusive on the parties. In the event
the aforementioned procedure cannot yield a resolution, then the parties will
resort to arbitration provisions as noted in (Section 8.1). Final decisions by
an arbitrator will be considered final and binding for both parties.
ARTICLE III
SUPPLY
3.1 AGREEMENT TO SUPPLY.
(a) In order to facilitate the processing of the Material and the
production of the Products contemplated by this Agreement, the
Client hereby agrees to supply to ORTE all of ORTE's
requirements for Material for use by ORTE in the production of
the Products, throughout the term of this Agreement, or as
further set forth on Schedule 1.0 (the "Supply and Capacity
Requirements"). Such Material shall conform to the quality
standards set forth on Schedule 2.0 (the "Quality Standards").
(b) ORTE will be responsible for concentrating the Material for
use in its process. The cost of concentration will be part of
the Processing Fee.
(c) Within five (5) calendar days of Material shipped to ORTE for
Processing hereunder, the Client shall provide Material Safety
Data Specifications (MSDS), of each shipment or concentration
of any Material to ORTE. It is agreed the frequency of this
report (MSDS) is mutually acceptable to both parties and must
be within the standards for legal, transportation and
environmental regulations.
3.2 TRANSPORTATION. As between the parties, the mutually agreed upon
third party shall be solely responsible for transporting the first 300 tons of
Material to ORTE's processing facilities (the "Facilities"). As between ORTE and
the third party, all costs and expenses related to such transportation, and any
risk of loss associated therewith, shall be borne solely by the third party.
Subsequently, any shipment of Material to the Facility, over the
initial 300 tons shall be the sole responsibility of ORTE, with all costs and
expenses related to such transportation, and any risk of loss associated
therewith to be borne solely by ORTE. The Client will still be responsible for
providing MSDS reports as noted in Section (3.1.c) above.
3.3 SUPPLY FORECASTS. At least sixty (60) days prior to January 1 of
each calendar year (or any fractional year) during the term of this Agreement,
the Client shall furnish ORTE with a written good faith estimate of its
projected supply of Material to ORTE, by month, for the following calendar year,
and (ii) ORTE shall furnish the Client with a written, non-binding, good faith
estimate of its production capability of the Material, by month, for the
following calendar year, which estimates may be revised quarterly.
ARTICLE IV
PROCESSING
4.1 SPECIFICATIONS; CHANGES; MEETING OF SPECIFICATIONS; PROPRIETARY
RIGHTS.
(a) SPECIFICATIONS. The applicable specifications for the
Products shall be those set forth on Schedule 3.1, and any and all
additions or changes to such specifications in accordance with (Section
4.1(c)) (collectively, the "Specifications"), which information shall
be provided by ORTE to the Client for the Client's use during the term
of this Agreement.
(d) PROPRIETARY INFORMATION. All proprietary information will
be handled per the provisions noted in the Non-Disclosure Agreement
(NDA) executed between the parties on June 15th, 2004. (A copy of which
is attached as Exhibit 4.0.)
4.2 SHIPPING, STORAGE AND SALE ARRANGEMENTS. Prior to the commencement
of Processing under this Agreement, ORTE will enter into an agreement with
[METALOR, INC. ("METALOR"),] or another party satisfactory to ORTE and the
Client, with regard to the final handling, refining, auditing, shipping, storage
and sale of the Product. A summary of the preliminary terms of the proposed
agreement between ORTE and Metalor as of the date hereof is attached as Exhibit
1.0.
ARTICLE V
TERM AND TERMINATION
5.1 TERM. The term of this Agreement shall begin on the Effective Date
and, unless sooner terminated in accordance with the provisions of this Article
V, will have a term of a minimum of thirty six (36) months unless extended by
mutual agreement of the parties. In the event the parties cannot agree on an
extension then a 180 written notice prior to the termination of this Agreement
must be submitted by either party or either or as provided by the following
conditions:
5.2 TERMINATION BY ORTE. Prior to its expiration, this Agreement may be
terminated by ORTE as set forth below:
(a) BREACH. In the event that the Client materially breaches
any of its obligations under this Agreement and fails to cure such
breach within thirty (30) days after receipt of written notice from
ORTE detailing such breach, ORTE may terminate this Agreement upon
notice to the Client.
(b) BANKRUPTCY. To the extent permitted by applicable law, in
the event that the Client should become insolvent, go into liquidation,
whether voluntarily or by operation of law, or have a receiver
appointed for any of its assets, make any other arrangements for the
benefit of its creditors, or be subject of the provisions of any
Chapter of the Bankruptcy Act, then ORTE may terminate this Agreement
upon fifteen (15) days' notice to Client.
(c) CLIENT CHANGE IN CONTROL. In the event of a "Change in
Control" (as of the Client, which is determined as more than a 50%
change of the current members, ORTE may terminate this Agreement upon
written notice to the Client.
5.3 TERMINATION BY THE CLIENT. Prior to its expiration, this Agreement
may be terminated by the Client as set forth below:
(a) BREACH. In the event that ORTE materially breaches any of
its obligations under this Agreement and fails to cure such breach
within thirty (30) days after receipt of written notice from the Client
detailing such breach, the Client may terminate this Agreement upon
notice to ORTE.
(b) BANKRUPTCY. To the extent permitted by applicable law, in
the event that ORTE should become insolvent, go into liquidation,
whether voluntarily or by operation of law, or have a receiver
appointed for any of its assets, make any other arrangements for
the benefit of its creditors, or be subject of the provisions of
any Chapter of the Bankruptcy Act, then the Client may terminate
this Agreement upon fifteen (15) days' notice to ORTE.
5.4 EFFECT OF TERMINATION. Upon termination of this Agreement, except
as otherwise provided herein:
(a) ORTE shall cease to Process the Material;
(b) Each party shall cease to use all Confidential Information
as provided in the provisions of the executed NDA in Exhibit 4.0. (d)
For a period of one year following the date of termination of this
Agreement for any reason, neither the Client nor any of its affiliates
will manufacture, process (or contract to have manufactured or
processed) or purchase any product having specifications similar to the
specifications used for the Products. Exclusions from this section
(5.4(b)) include the entities noted by the client in Exhibit 5.0.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF ORTE. ORTE hereby makes the
following representations and warranties as follows to the Client as of the date
hereof.
(a) Organization. ORTE is a corporation duly organized,
validly existing and in good standing under the laws of the state
of its organization and has all requisite power and authority to
carry on and conduct its business as it is now being conducted and
to own or lease its properties and assets.
(b) Power and Authority. ORTE has the right, power and
capacity to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by ORTE, and the
consummation of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
ORTE.
(c) Enforceability. This Agreement has been duly and validly
executed and delivered by ORTE and constitutes ORTE's legal, valid
and binding obligation, enforceable in accordance with its terms.
(d) No Conflict. The execution and delivery of this Agreement
by ORTE, the consummation of the transactions contemplated herein
by ORTE, and the performance of the covenants and agreements of
ORTE, with or without the giving of notice or the lapse of time,
or both, do not: (i) violate or conflict with any of the
provisions of any charter document or bylaw of ORTE; (ii) violate,
conflict with or result in a breach or default under or cause
termination of any term or condition of any mortgage, indenture,
contract, license, permit, instrument, trust document, will, or
other agreement, document or instrument to which ORTE is a party
or by which ORTE or its properties may be bound; (iii) violate any
provision of law, statute, regulation, court order or ruling of
any governmental authority, to which ORTE is a party or by which
it or its properties may be bound; or (iv) result in the creation
or imposition of any lien, claim, charge, restriction, security
interest or encumbrance of any kind whatsoever upon any asset of
ORTE.
(e) Required Consents and Approvals. No consent or approval is
required by virtue of the execution hereof by ORTE or the
consummation of any of the transactions contemplated herein by
ORTE to avoid the violation or breach of, or the default under, or
the creation of a lien on assets of ORTE pursuant to the terms of,
any regulation, order, decree or award of any court or
governmental agency or any lease, agreement, contract, mortgage,
note, license, or any other instrument to which ORTE is a party or
to which it or any of its property or assets or equity interests
is subject.
(f) No Violation of Law. ORTE is not and has not been and will
not be (by virtue of any past or present action, omission to act,
contract to which it is a party or any occurrence or state of
facts whatsoever) in violation of any applicable local, state or
federal law, ordinance, regulation, order, injunction or decree,
or any other requirement of any governmental body, agency or
authority or court binding on it, or relating to its property or
business or its advertising, sales or pricing practices
(including, without limitation, any antitrust laws and
regulations), and ORTE will not hereafter suffer or incur any
loss, liability, penalty or expense (including, without
limitation, attorneys' fees) by virtue of any such violation.
6.2 REPRESENTATIONS AND WARRANTIES OF THE CLIENT. The Client hereby
makes the following representations and warranties as follows to ORTE as of the
date hereof.
(a) INCORPORATION. The Client is a limited liability
corporation duly organized, validly existing and in good standing under
the laws of the states of its organization and has all requisite power
and authority, corporate or otherwise, to carry on and conduct its
business as it is now being conducted and to own or lease its
properties and assets.
(b) POWER AND AUTHORITY. The Client has the right, power and
capacity to execute, deliver and perform this Agreement and to
consummate the transactions contemplated have been duly authorized by
the Manager of the Client, hereby as further evidenced by the
signatures to this Agreement; (ii) and Exhibit 3.0 - Proof of Clear
Title, which provides a written statement prepared by the Manager of
the Client indicating the Material is clear and free of any liens and
is the sole property of the Client.
(c) ENFORCEABILITY. This Agreement has been duly and validly
executed and delivered by the Client and constitutes the Client's
legal, valid and binding obligation, enforceable in accordance with its
terms.
(d) NO CONFLICT. The execution and delivery of this Agreement
by the Client, the consummation of the transactions contemplated herein
by the Client, and the performance of the covenants and agreements of
the Client, with or without the giving of notice or the lapse of time,
or both, do not: (i) violate or conflict with any of the provisions of
any charter document or bylaw of the Client; (ii) violate, conflict
with or result in a breach or default under or cause termination of any
term or condition of any mortgage, indenture, contract, license,
permit, instrument, trust document, will, or other agreement, document
or instrument to which the Client is a party or by which the Client or
its properties may be bound; (iii) violate any provision of law,
statute, regulation, court order or ruling of any governmental
authority, to which the Client is a party or by which it or its
properties may be bound; or (iv) result in the creation or imposition
of any lien, claim, charge, restriction, security interest or
encumbrance of any kind whatsoever upon any asset of the Client.
(e) REQUIRED CONSENTS AND APPROVALS. No consent or approval is
required by virtue of the execution hereof by the Client or the
consummation of any of the transactions contemplated herein by the
Client to avoid the violation or breach of, or the default under, or
the creation of a lien on assets of the Client pursuant to the terms
of, any regulation, order, decree or award of any court or governmental
agency or any lease, agreement, contract, mortgage, note, license, or
any other instrument to which the Client is a party or to which it or
any of its property or assets or equity interests is subject.
(f) NO VIOLATION OF LAW. The Client is not and has not been
and will not be (by virtue of any past or present action, omission to
act, contract to which it is a party or any occurrence or state of
facts whatsoever) in violation of any applicable local, state or
federal law, ordinance, regulation, order, injunction or decree, or any
other requirement of any governmental body, agency or authority or
court binding on it, or relating to its property or business or its
advertising, sales or pricing practices (including, without limitation,
any antitrust laws and regulations), and the Client will not hereafter
suffer or incur any loss, liability, penalty or expense (including,
without limitation, attorneys' fees) by virtue of any such violation.
(g) LITIGATION. There are no litigation, claims, suits,
actions, investigations, indictments or information, proceedings or
arbitrations, grievances or other procedures (including grand jury
investigations, actions or proceedings, and product liability and
workers' compensation suits, actions or proceedings) pending, or to the
knowledge of the Client or any of its directors, officers or
shareholders, threatened, before any court, commission, arbitration
tribunal, or judicial, governmental or administrative department, body,
agency, administrator or official, grand jury, or any other forum for
the resolution of grievances, against the Client or any of its
directors, officers or shareholders or involving any of its property or
business. Further, except as set forth in Schedule 6.2(i), there are no
judgments, orders, writs, injunctions, decrees, indictments or
informations, grand jury subpoenas or civil investigative demands, plea
agreements, stipulations or awards (whether rendered by a court,
commission, arbitration tribunal, or judicial, governmental or
administrative department, body, agency, administrator or official,
grand jury or any other forum for the resolution of grievances) against
or relating to the Client or any of its directors, officers or
shareholders or involving any of its property or business. The Client
has made available to ORTE true, correct and complete copies of
pleadings, briefs and other documents filed in each pending litigation,
claim, suit, action, investigation, indictment or information,
proceeding, arbitration, grievance or other procedure.
ARTICLE VII
OTHER COVENANTS AND AGREEMENTS
7.1 OVERSIGHT COMMITTEE; MEETINGS. An oversight committee (the
"Oversight Committee") shall be formed for the purpose of addressing issues
which may arise from time to time in the implementation of this Agreement. The
Oversight Committee shall meet on a monthly basis at an agreed upon location or
by teleconference and as needed to represent each party's interests. Issues
which may be addressed include, without limitation, the following:
(a) Scheduling of Material Processing for the next 180-day
period;
(b) Changes in demands for Material Processing;
(e) Coordination of distribution, marketing and sales of
Products;
(g) Product yields and materials usage; or
(j) Any issue raised by either ORTE or the Client with respect
to any services provided hereunder.
The Oversight Committee shall be composed of two duly designated representatives
from each of ORTE and the Client (the "Committee Representatives"). ORTE and the
Client shall each notify the other of its designated Committee Representatives,
together with the names of alternates who, in the absence of one or both of the
Committee Representatives, shall be deemed to be Committee Representatives of
ORTE and the Client, as applicable. Each of ORTE and the Client shall have the
right to substitute other persons as its Committee Representatives or alternates
by so notifying the other party thereof. ORTE and the Client may at their option
have one or more alternates attend Oversight Meetings along with their
designated Committee Representatives. In the event the Oversight Committee
cannot reconcile a dispute and is in a stalemate, the such dispute will be
addressed per the provisions of arbitration noted in (Section 8.1).
7.2 RECORDS.
(a) All Product Documents shall be retained by ORTE for five
(5) years. At the end of such period, unless otherwise agreed to in
writing by the Client, all such Product Documents shall be placed in
long term storage at ORTE's expense.
(b) ORTE shall maintain true and correct records of the costs
and expenses incurred in connection with the performance of its duties
hereunder and shall retain all such records and information for at
least five (5) years after their creation.
(c) The Client and its representatives shall have the right to
examine and audit said Product Documents and records once per calendar
year upon reasonable prior written notice to ORTE. Any such examination
or audit shall be conducted in a manner to minimize disruption of
business operations and shall be subject to the confidentiality
provisions set forth in this Agreement.
7.3 INSPECTION OF FACILITIES. The Client or its designated
representatives shall be given reasonable access during business hours to ORTE's
facilities to observe and inspect all phases of ORTE's services to be performed
hereunder. Any such inspection shall be conducted in a manner to minimize
disruption of business operations and shall be subject to the confidentiality
provisions set forth in this Agreement.
7.4 CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. It is anticipated that it will
be necessary, in connection with their obligations under this Agreement
for the parties to disclose to each other Confidential Information
and/or Trade Secrets. The Confidential Information and/ or Trade
Secrets shall include, but not be limited to, information disclosed in
writing or other tangible form, including samples of materials; as
noted in the executed Non-Disclosure Agreement (See Exhibit 4.0)
(g) INJUNCTIVE RELIEF. Both parties understand and agree that
the injury suffered by the disclosing party in the event of a breach
hereof cannot be compensated by monetary damages alone, and both
parties therefore agree that the disclosing party, in addition to and
without limiting any other remedies or rights which it may have either
under this Agreement or otherwise, shall have the right to seek an
injunction against the recipient from any court of competent
jurisdiction enjoining any actual or threatened breach of this Section
7.4 by the recipient.
7.5 TITLE; RISK OF LOSS.
(a) Except as otherwise provided in this Agreement, title to
and all other incidents of ownership of all Material shall be with the
Client at all times while in possession or custody of ORTE and title
shall not be deemed to be in ORTE. ORTE shall label and identify the
Material in such a way as to put creditors and others on notice that
the Client retains title thereto. ORTE shall not sell or otherwise
dispose of the Material, or use the Material in any way other than as
provided in this Agreement. The Material shall not be subject to lien
for payments or other encumbrances made, done or suffered by ORTE; and
ORTE shall not, directly or indirectly, create, assume or permit to
exist any mortgage, lien, charge or encumbrance on or pledge or
security interest of any kind or character on the Material or any part
thereof, nor take, nor permit to be taken, any action that might result
in a mortgage, lien, charge, encumbrance, pledge or security interest
on the same. In the event that any of the foregoing shall exist against
the Material, or in the event any notice of attachment, levy or
garnishment shall be served on ORTE in connection with the Material,
ORTE shall promptly remove or discharge the same by bonding, payment or
otherwise, but in no event more than fifteen (15) days after the date
on which ORTE has been served or received notice of the same.
(b) All of the Material remaining in ORTE's possession or
custody upon termination of this Agreement shall be returned by ORTE to
the Client within sixty (60) days after the effective date of such
termination, with ORTE bearing all packing and loading costs and the
Client bearing the costs of shipping and insuring delivery; provided,
however, that, if said termination is due to any breach of ORTE's
obligations, warranties or representations under this Agreement, ORTE
shall bear, in addition to packing and loading costs, the costs of
shipping and insuring delivery of the Material and of any appropriate
documents to a delivery point in the United States designated by the
Client.
(c) While any and all of the Products are in the possession,
custody or control of ORTE, ORTE agrees to bear the risk of any loss or
damage to same. The Products shall be deemed to be in the possession,
custody or control of ORTE at the Facilities and shall remain in ORTE's
possession, custody and control until transferred to the possession,
custody and control of Metalor as herein provided.
7.6 LIMITATION OF LIABILITY. EXCEPT AS OTHERWISE PROVIDED BY THIS
AGREEMENT, THE CLIENT'S EXCLUSIVE REMEDY SHALL BE FOR DAMAGES, AND ORTE'S TOTAL
LIABILITY FOR ANY AND ALL LOSSES AND DAMAGES ARISING OUT OF ANY CAUSE WHATSOEVER
(WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER
TORT OR OTHERWISE) SHALL IN NO EVENT EXCEED THE FAIR MARKET VALUE OF THE PRODUCT
IN RESPECT TO WHICH SUCH CAUSE ARISES OR, AT ORTE'S OPTION, THE REPLACEMENT OF
SUCH PRODUCT. IN NO EVENT SHALL ORTE BE LIABLE TO THE CLIENT OR ANY THIRD PARTY
FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, EXEMPLARY OR CONSEQUENTIAL
DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT.
ARTICLE VIII
DISPUTE RESOLUTION
8.1 ARBITRATION. Except as specifically provided by Section 2.3 and
Section 7.4(g) hereof, any dispute, controversy or claim arising out of or in
connection with this Agreement (a "Dispute") shall be determined and settled by
arbitration in Columbus, Georgia, pursuant to the Rules of Arbitration then in
effect of the American Arbitration Association. Except where clearly prevented
by the area in dispute, both parties agree to continue performing their
respective obligations under this Agreement while the Dispute is being resolved.
Arbitration shall not prevent any party from seeking equitable relief, including
an injunction or specific performance, where such remedy is an appropriate form
of remedy under the circumstances.
8.2 NOTICE; SELECTION OF ARBITRATOR. Notice of a Dispute (the "Notice
of Dispute") shall be delivered in writing by one party to the other party as
provided in Section 9.8 hereof. Should the parties be able to agree upon the
selection of an arbitrator within thirty (30) days after delivery of Notice of
Dispute, the agreed upon arbitrator shall proceed forthwith to arbitrate the
Dispute. If the parties cannot agree on an arbitrator within such thirty (30)
days, then each party shall within fifteen (15) days thereafter choose an
arbitrator, and the two arbitrators shall choose a third arbitrator, and the
third arbitrator so selected shall proceed, as a sole arbitrator, to arbitrate
and resolve the Dispute.
8.3 ARBITRATION FINAL. Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in a court having
competent jurisdiction. The language of the award must set forth findings of
fact and conclusions of law used by the arbitrator in reaching his or her
decision. The expense of arbitration shall be borne by each party unless
otherwise decided or allocated by the arbitrator(s).
ARTICLE IX
MISCELLANEOUS
9.1 FORCE MAJEURE. Neither party shall be held liable for failure to
perform any activities hereunder if such failure is due to (i) act of God, war,
riot, fire, explosion, accident, sabotage; (ii) inability to obtain adequate
fuel, electric power, raw materials, labor, containers or transportation
facilities; (iii) national defense requirements; (iv) breakage or failure of or
damage to, machinery, equipment, or apparatus used in the performance of this
Agreement; (v) labor trouble; or (vi) compliance with Governmental Requirements.
Upon any such occurrence, the party whose performance is affected shall
immediately give written notice of the occurrence to the other party, and shall
thereafter exert all reasonable efforts to overcome the occurrence and resume
performance of this Agreement. If, despite such efforts, the party is unable to
overcome the occurrence and resume performance within five (5) days following
notification given hereunder, the parties shall consult with respect to an
equitable solution, including the possible termination of this Agreement.
9.2 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits attached hereto) constitutes the sole understanding of the parties with
respect to the subject matter hereof; provided, however, that this provision is
not intended to abrogate any other written agreement(s) between the parties
executed with or after this Agreement.
9.3 AMENDMENTS. No amendment, modification or alteration of the terms
or provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
9.4 SUCCESSORS AND ASSIGNS; PARTIES BOUND BY AGREEMENT. The terms,
conditions and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns
thereof. Without the prior written consent of ORTE, the Client may not assign,
by operation of law or otherwise, any of its rights, duties or obligations
hereunder or any part thereof to any other person or entity.
9.5 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall for all purposes be deemed to be an original
and all of which, when taken together, shall constitute one and the same
instrument.
9.6 HEADINGS. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
9.7 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar).
9.8 NOTICES. All notices, requests, instructions or other documents to
be given hereunder by any party hereto to any other party hereto shall be in
writing and shall be delivered personally (including by overnight courier or
express mail service) or sent by registered or certified mail, postage or fees
prepaid,
If to ORTE, to: Oretech, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, CEO
If to the Client, to: Strong Ox, LLC
000 X. 0000 X #0
Xxxxxxxxxxx, XX
Attention: Xxxx X. Xxxxx
or at such other address for such party as shall be specified by like notice.
Any notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or the office of such party. Any notice which is addressed
and mailed in the manner herein provided shall be conclusively presumed to have
been duly given to the party to which it is addressed at the close of business,
local time of the recipient, on the fourth (4th) business day after the day it
is so placed in the mail or, if earlier, the time of actual receipt.
9.9 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Alabama without giving effect to the
principles of conflicts of law thereof.
9.10 PUBLIC ANNOUNCEMENTS. No public announcement shall be made by any
person with regard to the transactions contemplated by this Agreement without
the prior written consent of the parties hereto; provided that either party may
make such disclosure if advised by counsel that it is legally required to do so.
The parties hereto will discuss any public announcements or disclosures
concerning the transactions contemplated by this Agreement with the other party
prior to making any such announcements or disclosures.
9.11 NO THIRD PARTY BENEFICIARIES. With the exception of the parties to
this Agreement, there shall exist no right of any person to claim a beneficial
interest in this Agreement or any rights occurring by virtue of this Agreement.
9.12 "INCLUDING." Words of inclusion shall not be construed as terms of
limitation herein, so that references to "included" matters shall be regarded as
non-exclusive, non-characterizing illustrations.
9.13 REFERENCES. Whenever reference is made in this Agreement to any
article, section, schedule or exhibit, such reference shall be deemed to apply
to the specified article or section of this Agreement or the specified schedule
or exhibit to this Agreement.
9.14 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect
against any party hereto, such invalidity, illegality or unenforceability shall
only apply to such party in the specific jurisdiction where such judgment shall
be made, and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, except that this Agreement shall not be reformed in any way that will
deny to any party the essential benefits of this Agreement, unless such party
waives in writing its rights to such benefits.
9.15 FURTHER ASSURANCES. Each of parties hereto will use its reasonable
best efforts to take all actions and do all things necessary, proper or
advisable following the execution of this Agreement to consummate and make
effective the transactions contemplated by this Agreement.
9.16 EXHIBITS AND SCHEDULES. Each of the exhibits referred to in this
Agreement and attached hereto, and all amendments thereto, are and shall be
incorporated herein and made a part hereof.
9.17 CURRENCY. All payments hereunder or contemplated by this Agreement
shall be paid in U.S. currency.
9.18 GENDER AND NUMBER. Where the context requires, the use of a
pronoun of one gender is to be deemed to include a pronoun of the appropriate
gender and singular words are to be deemed to include the plural, and vice
versa.
9.19 RELATIONSHIP OF PARTIES. Nothing contained in this Agreement, nor
the performance of this Agreement, shall be construed as constituting a
partnership or agency relationship between the parties hereto, and no party
hereto shall take any action, make any statement, or otherwise cause or allow to
occur any act or omission in conflict with this understanding.
IN WITNESS WHEREOF, the parties hereto have duly executed this Processing
Agreement as of the date first written above.
ORETECH, INC.
By: /s/ Xxxxxxx X.Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: CEO
STRONG OX, LLC
By: /s/ Xxxx X. Xxxxx
-------------------------
Name: Xxxx X. Xxxxx
Title: Manager
INDEX OF SCHEDULES
Schedules:
----------
1.0 Supply and Capacity Requirements
2.0 Quality Standards of Material
3.0 Product
3.1 Product Specifications
4.0 Processing Fee Schedule
Exhibits:
---------
1.0 Metalor Agreement
2.0 Corporate Resolutions Authorizing the Client and ORTE Signatories and
Exection of this Agreement
3.0 Client Proof of Clear Title to the Material and Confirmation of
Quantity to Supply
4.0 Executed Non-Disclosure Agreement between Oretech, Inc and Strong Ox,
LLC, (the Client)
5.0 Exclusions from Section 5.4(b).
SCHEDULE 1.0
SUPPLY AND CAPACITY REQUIREMENTS
--------------------------------
The Processing quantity of this Agreement will cover 500,000 tons of Material
supplied to ORTE from the Client over the term of this Agreement. Consequently,
unless amended by mutual agreement of the parties, ORTE will provide Capacity
Requirements to Process 500,000 tons of Material over the term of this
Agreement.
SCHEDULE 2.0
QUALITY STANDARDS OF MATERIAL
The Material provided to ORTE by the Client shall have been randomly
assayed by a third party certified assay laboratory. These assays shall
demonstrate that the Material being shipped to ORTE for processing consist of at
least one or more of the Product elements as further defined in Schedule 3.1.
These assays must further demonstrate that the Product(s) existing in the
Material assayed are consistent, homogenous and in quantities which deem the
Material equitable for both parties to process. In addition, proper and mutually
acceptable mineralization analysis will be conducted to determine the Material
is not hazardous or toxic in nature and meets all federal, state and local
environmental regulations.
SCHEDULE 3.0
PRODUCT
The Product is defined as dore' bars produced from the Material
provided by the Client, which will be sent to Metalor or another qualified metal
refiner, for final processing into finished metals.
SCHEDULE 3.1
PRODUCT SPECIFICATIONS
Specifications for the Product are dore' bars which consist of gold or
silver or other precious, base or platinum group metals (PGM) which were derived
from the Material received from the Client.
SCHEDULE 4.0
PROCESSING FEE
The Processing Fee will be comprised of the following cost elements and is
subject to change pending a monthly review by the Oversight Committee:
1) Transportation costs from the Client's site in Centerville,
Utah (Est. $40.00/ton processed)
2) Requisite costs of flux components, crucibles, or any other
materials considered as a consumable item needed to produce
the Product. (Est. $70.87-$150.00/ton processed)
3) Costs of labor to include personnel directly involved in the
processing of the Material. This includes operators, material
handlers, QA technicians and maintenance. (Est.$54.15 /ton
processed)
4) Plant Overhead expenses related to supervisory and engineering
personnel directly involved with the plant operations,
utilities, building rent, insurance, maintenance supplies and
depreciation. (Est. $47.41 /ton processed)
5) G & A Expenses which include the current officers and related
expenses for clerical/administrative personnel, insurance,
supplies, legal, and professional fees. (Est. $13.47/ton
processed)
6) Refining costs from Metalor (Est. 4.5 % of revenue generated)
7) Concentrating and testing costs of the Material supplied.
(Est. $30/ton processed)
Total per ton processed costs for items 1 thru 5 and number 7 are estimated at
$282.15 to $361.28. This is dependent on determination of the optimal flux
formulae, process life of crucibles and potential economies of scale associated
with bulk purchasing of flux materials.
