MINING MATERIALS PURCHASE AGREEMENT
This Mining Materials Purchase Agreement (the "Agreement") is entered into
as of March 26, 2003 (the "Effective Date") by and between RAMMSCO, Inc., a
Nevada corporation ("RAMMSCO" or the "Seller") and Humatech, Inc., an Illinois
corporation ("Humatech" or the "Purchaser"). Each of Seller and Purchaser shall
be referred to as a "Party" and collectively as the "Parties."
RECITALS
A. Seller owns certain mining rights (the "Mining Rights") to acquire
certain materials (the "Materials") from a designated area (the "Area") as set
forth in Exhibit A attached hereto (collectively the "Properties");
B. Seller desires to sell, and Purchaser desires to purchase, the
Materials on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and conditions contained
herein, Seller and Purchaser agree as follows:
ARTICLE I
CONSIDERATION
1.1 As consideration for the obligations of Seller under this Agreement,
including but not limited to the terms of Materials purchases as set forth in
Article II, the exclusivity set forth in Article III, and the option and right
of first refusal set forth in Article V, Purchaser shall pay to Seller the
consideration set forth in Exhibit B (the "Agreement Consideration").
1.2 The Agreement Consideration shall be deemed earned by Seller as of
the Effective Date of this Agreement, and shall not be subject to return or
cancellation upon termination of this Agreement, regardless of when this
Agreement may terminate.
ARTICLE II
TERMS OF MATERIALS PURCHASE
2.1 During the term of this Agreement, Seller agrees to sell to
Purchaser, from time to time as requested by Purchaser, any or all of the
Materials.
2.2 As consideration for the purchase of the Materials, Purchaser shall
pay the following:
A. Purchaser shall pay all direct costs of extracting the
Materials, with all such payments being made directly by Purchaser to the
parties to whom payment is due (the "Materials Extraction Costs"). For purposes
of this Agreement, Material Extraction Costs includes any fines, penalties,
assessments, liabilities (including workers compensation and/or tort liabili-
ties) arising as a result of Purchaser's extraction of the Materials. Any
third-party who may be contracted by Purchaser for extraction services shall be
approved, in writing, by Seller prior to the start of any extraction. Purchaser
may contract with Seller for certain extraction services, with consideration to
be negotiated and paid separate from this Agreement.
B. Purchaser shall pay to Seller, within thirty (30) days of
the delivery of any Materials to Purchaser, a (i) Bureau of Land Management cost
reimbursement payment, (ii) reclamation reserve payment, (iii) Non-accountable
expense reimbursement payment, and (iv) Material royalty payment, all as set
forth on Exhibit C (collectively, the "Materials Payments").
ARTICLE III
EXCLUSIVITY AND CONFIDENTIALITY
3.1 During the term of this Agreement, Seller shall not sell, or
negotiate or enter into any agreements to sell, any of the Properties, Mining
Rights, Materials, or other rights or materials from or to the Area, to any
party other than Purchaser.
3.2 The financial terms of this Agreement and all information relating
to the Properties that is derived pursuant to this Agreement, shall be the
exclusive property of the Parties and shall be treated by the Parties as
strictly confidential and shall not be disclosed to any third parties without
the prior written consent of both Parties hereto, which consent shall not be
withheld unreasonably. Following notice to the other Party and provided that the
third party agrees in writing to treat the same as confidential to the same
extent as the Parties are hereby obligated, it is specifically agreed that such
information may be provided without the consent of the other Party, to:
(a) lending institutions or lenders, for purposes of obtaining
financing;
(b) to an affiliate, consultant, contractor or subcontractor that
has a bona fide need to be informed; or
(c) to a governmental agency (including without limitation the
SEC) or to the public which the disclosing Party believes in good faith is
clearly required by pertinent law or regulation or the rules of any stock
exchange; provided however, that if there is a readily ascertainable statutory
or regulatory procedure available to maintain some or all of the disclosed
information confidential, then prior to or simultaneously with making such
disclosure the disclosing Party shall seek protection for the information being
disclosed to the maximum extent such protection is available.
This Section 3.2 shall survive the termination of this Agreement and shall
remain in effect for two (2) years following the date of termination.
ARTICLE IV
TERM AND TERMINATION
4.1 The term of this Agreement shall be for twenty (20) years from the
Effective Date, unless earlier terminated as provided herein.
4.2 This Agreement may be terminated by Seller, upon thirty (30) days
written notice, during which time the Purchaser shall have an opportunity to
cure the default without further recourse or damages, upon any of the following
(an "Event of Default"):
A. The failure of Purchaser to pay any of the Agreement
Consideration, Materials Extraction Costs, or the Materials Payments when they
become due;
B. The material breach of any representation or warranty in
this Agreement;
C. The breach of any covenant or undertaking, not otherwise
provided for in this Section 4.2;
D. A default shall occur in the payment when due (subject
to any applicable grace period), whether by acceleration or otherwise, of any
indebtedness of the Purchaser or an event of default or similar event shall
occur with respect to such indebtedness, if the effect of such default or event
(subject to any required notice and any applicable grace period) would be to
accelerate the maturity of any such indebtedness or to permit the holder or
holders of such indebtedness to cause such indebtedness to become due and
payable prior to its express maturity, and it will have a material adverse
effect on the operations of Purchaser;
E. The commencement by the Purchaser of any voluntary proceeding
under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, receivership, dissolution, or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or the adjudication of the
Purchaser as insolvent or bankrupt by a decree of a court of competent
jurisdiction; or the petition or application by the Purchaser for, acquiescence
in, or consent by the Purchaser to, the appointment of any receiver or trustee
for the Purchaser or for all or a substantial part of the property of the
Purchaser; or the assignment by the Purchaser for the benefit of creditors; or
the written admission of the Purchaser of its inability to pay its debts as they
mature; or
F. The commencement against the Purchaser of any proceeding
relating to the Purchaser under any bankruptcy, reorganization, arrangement,
insolvency, adjustment of debt, receivership, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect; provided,
however, that the commencement of such a proceeding shall not constitute an
Event of Default unless the Purchaser consents to the same or admits in writing
the material allegations of same, or said proceeding shall remain undismissed
for twenty (20) days; or the issuance of any order, judgment or decree for the
appointment of a receiver or trustee for the Purchaser or for all or a
substantial part of the property of the Purchaser, which order, judgment or
decree remains undismissed for twenty (20) days; or a warrant of attachment,
execution, or similar process shall be issued against any substantial part of
the property of the Purchaser.
4.3 This Agreement may be terminated by Purchaser, upon thirty (30)
days written notice, during which time the Seller shall have an opportunity to
cure the default without further recourse or damages, upon any of the following
(an "Event of Default"):
A. The failure of Seller to make available the Materials when
requested by Purchaser;
B. The termination, whether by their terms or as a result of a
breach thereof, of any agreement or agreements which grants to Seller its
interest in the Properties;
C. The material breach of any representation or warranty in
this Agreement;
D. The breach of any covenant or undertaking, not otherwise
provided for in this Section 4.3;
E. A default shall occur in the payment when due (subject to
any applicable grace period), whether by acceleration or otherwise, of any
indebtedness of the Seller or an event of default or similar event shall occur
with respect to such indebtedness, if the effect of such default or event
(subject to any required notice and any applicable grace period) would be to
accelerate the maturity of any such indebtedness or to permit the holder or
holders of such indebtedness to cause such indebtedness to become due and
payable prior to its express maturity, and it will have a material adverse
effect on the operations of Seller;
F. The commencement by the Seller of any voluntary proceeding
under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, receivership, dissolution, or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or the adjudication of
the Seller as insolvent or bankrupt by a decree of a court of competent
jurisdiction; or the petition or application by the Seller for, acquiescence in,
or consent by the Seller to, the appointment of any receiver or trustee for the
Seller or for all or a substantial part of the property of the Seller; or the
assignment by the Seller for the benefit of creditors; or the written admission
of the Seller of its inability to pay its debts as they mature; or
G. The commencement against the Seller of any proceeding
relating to the Seller under any bankruptcy, reorganization, arrangement,
insolvency, adjustment of debt, receivership, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect; provided,
however, that the commencement of such a proceeding shall not constitute an
Event of Default unless the Seller consents to the same or admits in writing the
material allegations of same, or said proceeding shall remain undismissed for
twenty (20) days; or the issuance of any order, judgment or decree for the
appointment of a receiver or trustee for the Seller or for all or a substantial
part of the property of the Seller, which order, judgment or decree remains
undismissed for twenty (20) days; or a warrant of attachment, execution, or
similar process shall be issued against any substantial part of the property of
the Seller.
ARTICLE V
OPTION FOR ADDITIONAL MATERIALS; RIGHT OF FIRST REFUSAL
5.1 During the term of this Agreement, Purchaser shall have the option
to purchase from Seller, on terms and conditions to be agreed upon by the
Parties, any other materials which may be derived from Seller's Mining Rights
for the Area.
5.2 During the term of this Agreement, and for a period of two (2)
years thereafter, Purchaser shall have a right of first refusal as against any
third party to purchase the Mining Rights and Materials derived from the Area on
terms identical to those which may be offered to Seller.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
6.1 As of the Effective Date, each Party warrants and represents to the
other that:
A. it is a corporation duly organized and in good standing in its
state of incorporation and is qualified to do business and is in good standing
in those states where necessary in order to carry out the purposes of this
Agreement;
B. it has the capacity to enter into and perform this Agreement
and all transactions contemplated herein and that all corporate, board of
directors, shareholder, surface and mineral rights owner, lessor, lessee, and
other actions required to authorize it to enter into and perform this Agreement
have been properly taken;
C. it will not breach any other agreement or arrangement by
entering into or performing this Agreement;
D. it is not subject to any governmental order, judgment,
decree, debarment, sanction or laws that would preclude the actions contemplated
by this Agreement;
E. this Agreement has been duly executed and delivered by it
and is valid and binding upon it in accordance with its terms.
6.2 As of the Effective Date, Seller represents and warrants to
Purchaser that:
A. With respect to the Properties in which Seller holds an
interest under leases or other contracts: (i) Seller is in exclusive possession
of such Properties; (ii) Seller has not received any notice of default of any of
the terms or provisions of such leases or other contracts; (iii) Seller has the
authority under such leases or other contracts to perform fully its obligations
under this Agreement; (iv) to Seller's knowledge, such leases and other
contracts are valid and are in good standing; (v) Seller has no knowledge of any
act or omission or any condition on the Properties which could be considered or
construed as a default under any such lease or other contract; (vi) to Seller's
knowledge, such Properties are free and clear of all encumbrances or defects in
title; (vii) to Seller's knowledge, there are no pending or threatened action,
suits, claims or proceedings, and there have been no previous transactions
affecting its interests in the Properties which have not been for fair
consideration; (viii) to Seller's knowledge, the conditions existing on or with
respect to the Properties and its ownership and operation of the Properties are
not in violation of any laws (including without limitation environmental laws),
or causing or permitting any damage (including environmental damage) or
impairment to the health, safety, or enjoyment of any person at or on the
Properties or in the general vicinity of the Properties; (ix) to Seller's
knowledge, there have been no past violations by it or by any of its
predecessors in title of any environmental laws or other laws affecting or
pertaining to the Properties, nor any past creation of damage or threatened
damage to the air, soil, surface waters, groundwater, flora, fauna, or other
natural resources on, about, or in the general vicinity of the Properties; and
(x) Seller has not received inquiry from or notice of a pending investigation
from any governmental agency or of any administrative or judicial proceeding
concerning the violation of any laws.
B. Seller has delivered or made available for inspection by
Purchaser all existing data concerning the Properties, and true and correct
copies of all leases or other contracts relating to the Properties.
6.3 The representations and warranties set forth above shall survive
the termination of this Agreement. For a representation or warranty made to a
Party's "knowledge," the term "knowledge" shall mean actual knowledge on the
part of the officers, employees, and agents of the representing Party, or of
facts that would reasonably lead to the indicated conclusions.
6.4 Each Party shall indemnify the other Party, its directors, officers,
affiliates, employees, agents, and attorneys (collectively, the "Indemnified
Parties") from and against all costs, expenses, damages or liabilities,
including attorneys' fees and other costs of litigation (either threatened or
pending) arising out of or based on a breach by a Party of any representation,
warranty, or covenant contained in this Agreement. If any claim or demand is
asserted against an Indemnified Party in respect of which such Indemnified Party
may be entitled to indemnification under this Agreement, written notice of such
claim or demand shall promptly be given to the Indemnifying Party. The
Indemnifying Party shall have the right, but not the obligation, by notifying
the Indemnified Party within thirty (30) days after its receipt of the notice of
the claim or demand, to assume the entire control of (subject to the right of
the Indemnified Party to participate, at the Indemnified Party's expense and
with counsel of the Indemnified Party's choice), the defense, compromise, or
settlement of the matter, including, at the Indemnifying Party's expense,
employment of counsel of the Indemnifying Party's choice. Any damages to the
assets or business of the Indemnified Party caused by a failure by the
Indemnifying Party to defend, compromise, or settle a claim or demand in a
reasonable and expeditious manner requested by the Indemnified Party, after the
Indemnifying Party has given notice that it will assume control of the defense,
compromise, or settlement of the matter, shall be included in the damages for
which the Indemnifying Party shall be obligated to indemnify the Indemnified
Party. Any settlement or compromise of a matter by the Indemnifying Party shall
include a full release of claims against the Indemnified Party which has arisen
out of the indemnified claim or demand.
ARTICLE VII
GENERAL PROVISIONS
7.1 Nothing contained in this Agreement shall be deemed to constitute
either Party as a partner or the venturer of the other, or, except as otherwise
herein expressly provided, to constitute either Party the agent or legal
representative of the other, or to create any fiduciary relationship between
them.
7.2 There are no implied covenants contained in this Agreement other
than those of good faith and fair dealing.
7.3 This Agreement shall be construed to benefit the Parties and their
respective successors and assigns only, and shall not be construed to create
third party beneficiary rights in any other party or in any governmental
organization or agency.
7.4 Except for matters of title to the Properties, which shall be
governed by the law of their situs, this Agreement shall be governed by and
interpreted in accordance with the laws of the State of Arizona, without regard
for any conflict of laws or choice of laws principles that would permit or
require the application of the laws of any other jurisdiction.
7.5 The Parties consent to the jurisdiction of any court of the State
of Arizona and of any federal court located in Arizona.
7.6 Should suit be brought to enforce or interpret any part of this
Agreement, the prevailing party shall be entitled to recover, as an element of
the costs of suit and not as damages, reasonable attorneys' fees to be fixed by
the court (including without limitation, costs, expenses and fees on any
appeal). The prevailing party shall be the party entitled to recover its costs
of suit, regardless of whether such suit proceeds to final judgment. A party
not entitled to recover its costs shall not be entitled to recover attorneys'
fees. No sum for attorneys' fees shall be counted in calculating the amount of
a judgment for purposes of determining if a party is entitled to recover costs
or attorneys' fees.
7.7 All notices, payments, and other required or permitted communi-
cations shall be in writing, and shall be addressed as follows:
If to Seller: RAMMSCO, Inc.
0000 Xxxxxxxxx Xxxx
Xxxx, XX 00000
If to Purchaser: Humatech, Inc.
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
All notices shall be given (a) by personal delivery to the Party, (b) by
facsimile, (c) by registered or certified mail return receipt requested; or (d)
by overnight or other express courier services. All notices shall be effective
and shall be deemed given on the date of receipt at the principal address if
received during normal business hours, and, if not received during normal
business hours, on the next business day following receipt. Either Party may
change its address by notice to the other Party.
7.8 The headings in this Agreement are provided for convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
7.9 The failure of either Party to insist on the strict performance of
any provisions of this Agreement or to exercise any right, power, or remedy upon
a breach hereof shall not constitute a waiver of any provision of this Agreement
or limit such Party's right thereafter to enforce any provision or exercise any
right.
7.10 No modification of this Agreement shall be valid unless made in
writing and duly executed by each Party.
7.11 Except for the obligation to make payments when due hereunder, the
obligations of a Party shall be suspended to the extent and for the period that
performance is prevented by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including, without limitation, labor disputes
(however arising and whether or not employee demands are reasonable or within
the power of the Party to grant); acts of God; laws, instructions or requests of
any government or governmental entity; judgments or orders of any court;
inability to obtain on reasonably acceptable terms any public or private
license, permit or other authorization; curtailment or suspension of activities
to remedy or avoid an actual or alleged, present or prospective violation
of environmental laws; action or inaction by any federal, state or local
agency that delays or prevents the issuance or granting of any approval or
authorization required to conduct operations beyond the reasonable expectations
of the Party seeking the approval or authorization; acts of war or terrorism
or conditions arising out of or attributable to war, whether declared or
undeclared; riot, civil strife, insurrection or rebellion; fire, explosion,
earthquake, storm, flood, sink holes, drought or other adverse weather
condition; delay or failure by suppliers or transporters of materials, parts,
supplies, services or equipment or by contractors' or subcontractors' shortage
of, or inability to obtain, labor, transportation, materials, machinery,
equipment, supplies, utilities or services; accidents; breakdown of equipment,
machinery or facilities; actions by native rights groups, environmental groups,
or other similar special interest groups; or any other cause whether similar or
dissimilar to the foregoing. The affected Party shall promptly give notice to
the other Party of the suspension of performance, stating therein the nature of
the suspension, the reasons therefor, and the expected duration thereof. The
affected Party shall resume performance as soon as reasonably possible.
7.12 Each Party shall take, from time to time and without additional
consideration, such further actions and execute such additional instruments as
may be reasonably necessary or convenient to implement and carry out the intent
and purpose of this Agreement.
7.13 This Agreement contains the entire understanding of the Parties
and supercedes all prior agreements and understandings between the Parties
relating to the subject matter hereof. This Agreement shall be binding upon and
inure to the benefit of the respective successors and permitted assigns of the
Parties.
7.14 This Agreement may not be assigned by either Party without the
express written consent of the other Party.
7.15 This Agreement may be executed in any number of counterparts, and
it shall not be necessary that the signatures of both Parties be contained on
any counterpart. Each counterpart shall be deemed an original, but all
counterparts together shall constitute one and the same instrument.
7.16 The Parties acknowledge that this Agreement was prepared by legal
counsel to the Purchaser, who did not and has not represented Seller. Each
Party has had the opportunity to have its legal counsel review this Agreement on
its behalf. If an ambiguity or question of law or intent arises with respect to
any provision of this Agreement, the Agreement will be construed as if drafted
jointly by the Parties. The Parties expressly agree that the construction and
interpretation of this Agreement shall not be strictly construed against the
drafter.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
"Seller" "Purchaser"
RAMMSCO, Inc. Humatech, Inc.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
-------------------------- ---------------------------
By: Xxxxx Xxxxxxxx By: Xxxxx Xxxxxxxx
Its: President Its: President
Attested: Attested:
/s/ Xxxx X. Rottweiler /s/ Xxxx X. Rottweiler
--------------------------- ---------------------------
By: Xxxx X. Rottweiler By: Xxxx X. Rottweiler
Its: Secretary Its: Secretary
EXHIBIT A
MINING RIGHTS, MATERIALS, AND AREA
* The description of Mining Rights, Materials, and the Area included in this
exhibit has been omitted as confidential and filed with the Commission.
EXHIBIT B
AGREEMENT CONSIDERATION
12,500,000 shares of Humatech, Inc. common stock, restricted in accordance
with Rule 144. The Parties agree that the value assigned to the shares of
common stock shall be $10,625,000, calculated by taking the 30-day average
closing price of Purchaser's common stock ($0.85 per share) and multiplying it
by the number of shares to be issued.
EXHIBIT C
MATERIALS PAYMENTS
* The description of Materials Payments included in this exhibit has been
omitted as confidential and filed with the Commission.
