CONTRIBUTION AGREEMENT
This Contribution Agreement (the "Agreement") is entered into effective as
of November 30, 2000 by and between Grant Claims, Inc., a Nevada corporation
("GCI"); Rubber Technology International, Inc., a Florida corporation ("RTEK"),
and Grant Claims, LLC, a Nevada limited liability corporation ("GCLLC"). GCI,
RTEK, and GCLLC shall be collectively referred to herein as the parties.
RECITALS
WHEREAS, GCLLC is the owner of certain mining, development and exploitation
rights to certain natural resources and an option to acquire said natural
resources, as further described in Exhibit "A," attached herewith (the "Sand
Assets").
WHEREAS, GCLLC, RTEK, and GCI desire to develop and market the Sand Assets;
WHEREAS, the parties intend to effect the transfers described below in
Sections 1 through 4 at the same time, all in transactions designed to meet the
requirements of section 351 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, the parties hereby agree as follows:
1. Transfer of RTEK Stock. At the Closing (as defined below), subject to
the terms and conditions herein set forth, and on the basis of the
representations, warranties and agreements herein contained, RTEK shall transfer
25,500,000 shares of its "restricted" common stock (the RTEK Shares) to GCI and
GCI shall transfer to RTEK 5,100,000 shares of the "restricted" common stock of
GCI, representing 51% of the outstanding common stock of GCI. Both the RTEK
Shares and the GCI Shares shall be free and clear of all liens, encumbrances,
claims, restrictions and adverse interests of any kind or nature (other than
customary restrictions pursuant to federal or California Securities laws).
2. Transfer of Sand Assets. At the date of the Closing, subject to the
terms and conditions herein set forth, and on the basis of the representations,
warranties and agreements herein contained, GCLLC shall assign, transfer and
convey the Sand Assets to GCI, and GCI shall transfer to GCLLC 4,900,000 shares
of the restricted common stock of GCI, representing 49% of the outstanding
common stock of GCI. The GCI Shares shall be free and clear of all liens,
encumbrances, claims, restrictions and adverse interests of any kind or nature
(other than customary restrictions pursuant to federal or California Securities
laws).
3. Contribution of Operating Capital. As additional consideration and to
induce GCLLC and GCI to enter into this Agreement and to consummate the
transactions contemplated hereby, RTEK agrees to contribute sufficient capital
to GCI to assure continued operation of GCI and the continued development of the
Sand Assets. Therefore, RTEK agrees to the following:
3.1 Upon thirty (30) days of the Closing (as defined below) RTEK shall
contribute to the capital of GCI, the sum of $100,000.
3.2 Thereafter, RTEK shall contribute to the capital of GCI, the sum of
$40,000 per month for a minimum of four months starting on the first day of the
second (2nd) month following the Closing.
3.3 RTEK shall also contribute to the capital of GCI, within nine (9)
months of the Closing, additional cash and loan strength sufficient to finance
the exercise of GCI's $500,000 option to acquire all remaining interests in the
Sand Assets from Dakota West, Inc.
4. Additional RTEK Stock Compensation. As additional consideration and
to induce GCLLC and GCI to enter into this Agreement and to consummate the
transactions contemplated hereby, RTEK agrees that for a period of three years
from the Closing, GCI is to receive additional RTEK common stock based on
production and shipment of product from the Sand Assets. For each 1,000 tons of
shipped product, regardless of the quality or intended use of the product, RTEK
agrees to issue twenty (20) shares of RTEK's common stock to GCI. The
calculation and shares issuance is to be completed annually, effective on each
ensuing November 30.
5. Prohibition on Issuance of Additional GCI Shares. As additional
consideration and to induce GCLLC and RTEK to enter into this Agreement and to
consummate the transactions contemplated hereby, GCI agrees that it shall not
issue any additional shares of its capital stock without the express prior
written consent of both RTEK and GCLLC.
6. Officers and Directors. Xxxxxx Xxxx shall be the sole officer and
director of GCI.
7. Closing and Delivery of Documents
7.1 Subject to termination of this Agreement as provided Section 8
(below), the Closing shall take place at the offices of RTEK, 0000 X. Xxxxxxxxxx
Xxxx., Xxx Xxxxxxx, XX 00000, as soon as possible upon execution of this
Agreement, or such other time and place as is mutually agreeable to the parties.
7.2 Simultaneously with the Closing, the following shall occur as a
single integrated transaction:
7.2.1 GCLLC shall deliver to GCI, all documents necessary, in form
and substance satisfactory to GCI, and shall be effective to vest in GCI, all
right, title and interest in and to, all of the Sand Assets, subject to the
rights of Dakota West, Inc.
7.2.2 GCI shall deliver certificates representing 4,900,000 shares
of GCI common stock (49% of the issued and outstanding shares) to and registered
in GCLLC's name, in form and substance satisfactory to GCLLC as shall be
effective to vest in GCLLC all right, title and interest in and to all of the
shares.
7.2.3 RTEK shall deliver certificates representing 25,500,000
shares of RTEK common stock to and registered in GCI's name, in form and
substance satisfactory to GCI as shall be effective to vest in GCI all right,
title and interest in and to all of the shares.
7.2.4 GCI shall deliver certificates representing 5,100,000 shares
of GCI common stock (51% of the issued and outstanding shares) to and registered
in RTEK's name, in form and substance satisfactory to RTEK as shall be effective
to vest in RTEK all right, title and interest in and to all of the shares.
8. Termination, Amendment, Waiver, and Recission.
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing by the mutual written consent of each of the parties hereto. Any
termination of this Agreement under this Section 8.1 shall be effected by the
delivery of written notice of the terminating party to the other parties hereto.
8.2 Waiver and Amendment. Any term, provision, covenant,
representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or
of the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
8.3 Recission. In the event that RTEK fails to comply with the
Contribution of Operating Capital requirements of Section 3 ( the "Default
Condition"), above, GCLLC may elect to rescind the Agreement as follows:
8.3.1 GCLLC shall provide RTEK with written notice of RTEK's
failure to comply with Section 3, specifying with reasonable particularity, the
Default Condition and indicating RTEK's desire to rescind the Agreement. Said
notice shall provide RTEK with thirty (30) days in which to cure such Default
Condition. In the event that RTEK fails to cure the Default Condition within
the (30) day period, and unless GCLLC elects to waive the Default Condition,
GCLLC shall be entitled to rescind the Agreement.
8.3.2 In the event that GCLLC rescinds the Agreement pursuant to
this section 8.3, then (i) GCI shall distribute the Sand Assets to GCLLC; (ii)
GCI shall distribute all RTEK shares to RTEK; (iii) GCI shall distribute cash to
RTEK in an amount no greater than the amount of cash contributed by RTEK to the
capital of GCI; and (iv) GCI shall distribute any remaining cash to GCLLC.
9. Representations and Warranties.
Each party hereby represents, warrants and covenants as follows:
a. When executed and delivered, the terms hereof shall constitute a valid
and legally binding agreement enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency or other laws affecting generally
the enforceability of creditors rights and by limitations on the availability of
equitable remedies.
b. Neither the execution and delivery of this Agreement nor the consummation
or performance of the transactions contemplated herein will violate any law,
rule, regulation, writ, judgment, injunction, decree, determination, or other
order of any court, government or governmental agency or instrumentality,
domestic or foreign, or conflict with or result in any breach of any of the
terms of or the creation or imposition of any mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance of any nature pursuant to
the terms of any contract or agreement.
10. Severability. If any portion of this Agreement is found by a court of
competent jurisdiction to be void or unenforceable, that portion shall be deemed
to be reformed to the extent necessary to cause such portion to be enforceable
and the same shall not affect the remainder of this Agreement, which shall be
given full force and effect without regard to the invalid or unenforceable
portions.
11. Entire Agreement. This Agreement, which may be signed in duplicate or
counterparts, replaces and supersedes all previous Agreements between the
parties hereto, and contains the entire understanding between the parties, and
may not be changed, altered, amended, or modified, except in writing, duly
executed by each of the parties.
12. Assignment. This Agreement may not be assigned or transferred by either
party hereto without the prior written consent of all other parties hereto.
13. Notices. All notices, requests, instruments or documents hereunder
shall be in writing and delivered personally or sent by registered or certified
mail, postage prepaid, or by facsimile transmission, telegraphic or similar
conveyance:
TO GCI:
Grant Claims, Inc.
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
with a copy to:
Israel & Friedberg, LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
(000) 000-0000
Attn: Xxxxxx Israel, Esq.
TO RTEK:
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
with a copy to:
M. Xxxxxxx Xxxxxx
The Xxxxxx Law Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
TO GCLLC
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by personal delivery in accordance
with the provisions of this Section, said notice shall be conclusively deemed
given at the time of such delivery. If notice is given by mail in accordance
with the provisions of this Section, such notice shall be conclusively deemed
given as of the date of the return receipt. If notice is given by telegraph in
accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time that the telegraphic agency shall confirm
delivery thereof to the addressee.
14. Governing Law. This Agreement shall be governed by the laws of the
State of California, United States of America.
15. Attorney's Fees. Should any action be commenced between the parties to
this Agreement concerning the matters set forth in this Agreement or the rights
and duties of either in relation thereto, the prevailing party in such action
shall be entitled, in addition to such other relief as may be granted, to a
reasonable sum as and for its Attorney's Fees and Costs.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
GRANT CLAIMS, INC., a
Nevada corporation ("GCI")
/s/ Xxxxxx Xxxx
By: Xxxxxx Xxxx
Its: President
RUBBER TECHNOLOGY INTERNATIONAL, INC.,
a Florida corporation ("RTEK")
/s/ Xxxxxx Xxxx
By: Xxxxxx Xxxx
Its: President
GRANT CLAIMS LLC
a Nevada limited liability company ("GCLLC")
/s/ Xxxxxx Xxxx
By: Xxxxxx Xxxx
Its: President
EXHIBIT "A"
SAND ASSETS
Full and complete ingress, egress and free access to the following to explore,
process, extract, stockpile and remove all minerals and materials including, but
not limited to sand, gravel and aggregates.
Mining Rights to twenty-four (24) unpatented mining claims located in Township
25 South, Range 60 East, Sections 21, 28, 33 and 34 and Township 26 South, Range
60 East, Sections 3 and 4, all in Xxxxx County, Nevada, more commonly known as
the Grant Group of Claims, Numbers 1-11, 13-16 and 22-30.
