SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
June 8, 1999
NORD RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-6202-2 85-0212139
(state or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
201 Third Street N.W., Suite 1750, Albuquerque, New Mexico 87102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (505) 766-9955
<PAGE>
ITEM 2. Acquisition or Disposition of Assets
On June 8, 1999, Nord Copper Corporation ("NCC"), a wholly-
owned subsidiary of Nord Resources Corporation ("Registrant"),
acquired a copper mining facility ("Johnson Camp Mine") in
Cochise County, Arizona, from Arimetco, Inc. In order to obtain
the right to the Johnson Camp Mine, NCC purchased those rights of
Summo USA Corporation, which had a purchase agreement with
Arimetco to acquire the Johnson Camp Mine and related assets from
Arimetco. The total consideration paid by Registrant and NCC was
(a) $310,000 in cash, (b) the issuance to Summo of 1,600,000
unregistered shares of Registrant's common stock $0.1 par value
and (c) a promissory note ("Promissory Note") from NCC in the
amount of $1,550,000, payable in three principal payments of
$500,000, $500,000 and $550,000, due on June 8, 2000, June 8,
2001 and June 8, 2002, respectively, together with interest at
the rate of 8% per annum payable quarterly. In addition to the
purchase price, NCC assumed the obligation to pay up to
$1,000,000 out of revenues from the Johnson Camp Mine to Arimetco,
at a rate of $0.2 per pound of copper sold, except that no payment
is due where the price is less than $1.00 per pound. All monies
used for the cash portion of the purchase price were from
Registrant's own funds. The payment of the Promissory Note is
guaranteed by Registrant and is secured by a lien on the Johnson
Camp Mine until the Promissory Note is paid in full. Neither
Arimetco nor Summo has any preexisting relationship with either
Registrant or any of its affiliates, directors or officers, or
any associates of any such directors or officers.
The Johnson Camp Mine is located in southeastern Arizona 65
miles east of Tucson and totals 2,723 acres consisting of
patented and unpatented mining claims and fee simple lands. The
existing facilities include a 4,000-gpm solvent extraction plant,
a tank farm, a 52,000 ppd capacity electrowinning plant with 74
electrowinning cells, four solution storage ponds with a capacity
of `eight million gallons, a truck shop, core storage building,
administrative and engineering office and warehouse, laboratory,
plant mechanical shop, a crusher station dump pocket and adjacent
fuel storage tanks, and various other equipment. Since 1975 the
Johnson Camp Mine has produced over 150 million pounds of cathode
copper from open pit mining, heap leaching and solvent extraction-
electrowinning (SX-EW) processing of oxide ores. Although
significant reserves remain, mining operations ceased in 1997.
Heap leaching continues and the mine has been producing one to
two million pounds of copper cathode annually.
Under an arrangement with Registrant's 28.5% affiliate, Nord
Pacific Limited ("Nord Pacific"), which operates a SX-EW copper
mine in Australia and was instrumental in identifying and
assessing the Johnson Camp Mine opportunity, Nord Pacific will
participate in management of the Johnson Camp Mine and will be
entitled to 20% of cash flow after Registrant has fully recovered
its past and future investment in the property.
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<PAGE>
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits required to be filed by Item 601 of Regulation
S-K:
Item No. Description
-------- ------------
10.123 Sale and Purchase Agreement (Johnson Camp
Mine) dated September 15, 1998
between Arimetco, Inc., as Seller
and Summo USA Corporation, as
Purchaser
10.124 Amendment of Sale and Purchase Agreement
(Johnson Camp Mine) dated January
19, 1999 between Arimetco, Inc., as
Seller and Summo USA Corporation,
as Purchaser
10.125 Second Amendment of Sale and Purchase
Agreement (Johnson Camp Mine) dated
May 26, 1999 between Arimetco,
Inc., as Seller and Summo USA
Corporation, as Purchaser
10.126 Acquisition Agreement dated June 4,
1999 among Nord Resources
Corporation, Nord Copper
Corporation and Summo USA
Corporation
10.127 Promissory note dated June 8, 1999 from
Nord Copper Corporation to Arimetco, Inc.
10.128 Unconditional Guarantee of Payment dated
June 8, 1999 from Nord Resources Corporation
in favor of Arimetco, Inc.
10.129 Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing dated
June 8, 1999 between Nord Copper
Corporation and Arimetco, Inc.
10.130 Grant of Production Payment (Johnson Camp
Mine) effective as of June 8, 1999
from Nord Copper Corporation to
Arimetco, Inc.
99.1 Press release of Nord Resources Corporation
dated June 9, 1999.
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<PAGE>
Pursuant to the requirements of the securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
NORD RESOURCES CORPORATION
Date: June 23, 1999 By: /s/ W. Pierce Carson
W. Pierce Carson
President & CEO
EXHIBIT INDEX
Sequentially
Item No. Description Numbered Page
10.123 Sale and Purchase Agreement 1-19
(Johnson Camp Mine) dated September 15, 1998
between Arimetco, Inc., as Seller and Summo
USA Corporation, as Purchaser
10.124 Amendment of Sale and Purchase Agreement 20-23
(Johnson Camp Mine) dated January 19, 1999
between Arimetco, Inc., as Seller and Summo
USA Corporation, as Purchaser
10.125 Second Amendment of Sale and Purchase 24-27
Agreement (Johnson Camp Mine) dated
May 26, 1999 between Arimetco, Inc.,
as Seller and Summo USA Corporation,
as Purchaser
10.126 Acquisition Agreement dated June 4, 1999 28-45
among Nord Resources Corporation, Nord Copper
Corporation and Summo USA Corporation
10.127 Promissory note dated June 8, 1999 from Nord 46-49
Copper Corporation to Arimetco, Inc.
10.128 Unconditional Guarantee of Payment dated June 8, 50-53
1999 from Nord Resources Corporation in favor
of Arimetco, Inc.
- iii -
<PAGE>
Sequentially
Item No. Description Numbered Page
10.129 Deed of Trust, Assignment of Rents, 54-76
Security Agreement and Fixture Filing
dated June 8, 1999 between Nord Copper
Corporation and Arimetco, Inc.
10.130 Grant of Production Payment (Johnson Camp 77-82
Mine) effective as of June 8, 1999 from
Nord Copper Corporation to Arimetco, Inc.
99.1 Press release of Nord Resources Corporation 83-84
dated June 9, 1999.
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EXHIBIT 10.123 SALE AND PURCHASE AGREEMENT
(Johnson Camp Mine)
THIS SALE AND PURCHASE AGREEMENT is made by and among
ARIMETCO, INC., a Nevada corporation ("ARIMETCO" or "SELLER"),
whose address is 335 North Wilmot Road, Suite 400, Tucson,
Arizona 85711; and SUMMO USA CORPORATION, a Colorado corporation
("SUMMO"), whose address is 1776 Lincoln Street, Suite 900,
Denver, Colorado 80203.
RECITALS
A. ARIMETCO is the Debtor-in-Possession under Case
No. 97-00004-TUC-JMM that is pending in the United States
Bankruptcy Court for the District of Arizona (Tucson Division)
(the "Reorganization Case").
B. AmPac Mining Southwest, Inc., A Delaware corporation
("AMPAC"), was a wholly owned subsidiary of ARIMETCO and the
owner of the Johnson Camp Property (as hereinafter defined).
C. Pursuant to an order of the Bankruptcy Court in the
Reorganization Case, AMPAC has been substantively consolidated,
liquidated and dissolved into ARIMETCO, and as a consequence,
ARIMETCO is now the owner of the Johnson Camp Property.
D. Subject to Bankruptcy Court approval, SELLER desires to
sell, and SUMMO desires to purchase, the Johnson Camp Property.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions contained in this Agreement, the
parties agree as follows:
I. DEFINITIONS AND CONSTRUCTION.
1.1 In addition to the capitalized terms defined above,
whenever used in this Agreement, unless another meaning is
expressly indicated, the following defined terms shall have the
meanings ascribed to them below, all of which definitions shall
be substantive terms of this Agreement:
"$" and "Dollars" mean the currency of the United States of
America.
"Affiliate" means any person, partnership, joint venture,
corporation, or other form of enterprise which directly or
indirectly controls, is controlled by, or is under common control
with, SUMMO. For purposes of the preceding sentence, "control"
means possession, directly or indirectly, of the power to direct
or cause direction of management and policies through ownership
of voting securities, contract, voting trust, or otherwise.
"Agreement" means this Sale and Purchase Agreement, which
includes and by this reference incorporates Exhibits "A" through
"L" attached to this Sale and Purchase Agreement, and all
amendments or supplements to this Sale and Purchase Agreement
that the parties may approve in writing.
"Bankruptcy Court Order" means the order of the Bankruptcy
Court in the Reorganization Case authorizing and approving the
sale of the Johnson Camp Property to SUMMO pursuant to the 363
Sale and in accordance with this Agreement.
"Books, Records, and Accounts" means the books, records, and
accounts that relate to the Johnson Camp Property and which are
more particularly described in Part 3 of Exhibit "B" attached
hereto provided, however, that any books, records and/or accounts
that are listed on Exhibit "B" which do not relate to the Johnson
Camp Property are not included in the definition of Books,
Records, and Accounts.
"Buildings and Equipment" means the buildings and equipment
located on the Mining Property that are more particularly
described in Part 1 of Exhibit "B" attached hereto.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required
to close.
"Closing" means the consummation of the sale by SELLER and
the purchase by SUMMO of the Johnson Camp Property, as provided
in this Agreement.
"Code" means the Title 11 of the United States Code, as
amended.
"Committee" means the Official Committee of Unsecured
Creditors in the Reorganization Case.
"Confidentiality Agreement" means the Confidentiality
Agreement dated September 10, 1997, entered into by and between
ARIMETCO and SUMMO.
"Effective Date" means the date of entry of the Bankruptcy
Court Order approving the sale of the Johnson Camp Property to
SUMMO; provided, however, that no appeal of such order is filed
within the time allowed by law. If (i) the Bankruptcy Court
specifically disapproves the sale of the Johnson Camp Property to
SUMMO, or (ii) the Bankruptcy Court fails to approve the sale
within sixty (60) days after the 363 Motion has been filed, or
(iii) an appeal of the Bankruptcy Court Order is filed within the
time allowed by law and a stay pending appeal is entered before
the payment of any amount required by Section 2.5(a), then this
Agreement shall be null and void ab initio. If an appeal is
filed within the time allowed by law but no stay is entered,
SUMMO may by notice to ARIMETCO elect to proceed with its
purchase of the Johnson Camp Property and to have this Agreement
effective as of the date of the entry of the Bankruptcy Court
Order.
"Escrow Agent" means Pioneer Title Agency, Inc. of Sierra
Vista, Arizona.
"Excluded Assets" has the meaning set forth in Section 2.22
hereof and comprise those assets listed on Part 5 of Exhibit "B."
"Fee Lands" means the fee lands owned by SELLER located in
Cochise County, Arizona that are more particularly described in
Part 2 of Exhibit "A" attached hereto.
"Final Order" means an order of the Bankruptcy Court as to
which (i) any appeal that has been taken has been finally
determined or dismissed; (ii) the time for appeal has expired and
no appeal has been timely filed; or (iii) if an appeal,
reargument, certiorari, or rehearing thereof has been sought,
such order has not been stayed.
"Geological Data" means the geological, engineering, and
technical data, information, records, and maps relating to the
Johnson Camp Property that are more particularly described in
Part 4 of Exhibit "B" attached hereto.
"Inventories and Supplies" means the inventories and
supplies located on the Mining Property that are more
particularly described in Part 2 of Exhibit "B" attached hereto.
The term Inventories and Supplies shall not include cathode
copper produced by SELLER and sold to Billiton Stratcor, Inc.,
prior to the date of Closing, or any proceeds from the sale of
such cathode copper.
"Johnson Camp Property" means collectively the Mining
Property, Personal Property, and Contracts.
"Lien" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest.
"Mining Property" means collectively the Fee Lands; Patented
Mining Claims; Rights-of-Way; Unpatented Mining Claims; and Water
Rights, Wells, and Agreements. The term "Mining Property" shall
also include all stockpiles, leach heaps, dumps, and tailings
situated on the Mining Property.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with
respect to quantity and frequency).
"Patented Mining Claims" means the patented mining claims
located in Cochise County, Arizona that are more particularly
described in Part 1 of Exhibit "A" attached hereto.
"Permits" means all permits, licenses, registrations,
qualifications and other approvals that have been issued by any
federal, state, tribal, or local governmental body and are in
effect at the date of this Agreement or that may be issued by any
such body on or before the Closing, and that are assignable
pursuant to applicable law, and that relate to the ownership,
construction, operation, maintenance, repair and replacement of
the Mining Property.
"Permitted Encumbrances" means those encumbrances against
the Mining Property that are identified on Exhibit "C" attached
hereto.
"Person" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political
subdivision thereof.
"Personal Property" means the Buildings and Equipment;
Inventories and Supplies; Books, Records, and Accounts; the
Geological Data and the Permits, as listed on Parts 1 through 4
of Exhibit "B," together with the proceeds of any insurance
thereon.
"Purchase Price" means the sum described in Section 2.5,
which shall be payable as provided in this Agreement.
"Removal Period" has the meaning set forth in Section 2.22
hereof.
"Rights-of-Way" mean the rights-of-way located in Cochise
County, Arizona that are associated with the Mining Property and
which are more particularly described in Part 4 of Exhibit "A"
attached hereto.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profit, environmental
(including taxes under IRC Section 59A), customs duties, capital
stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on, minimum, estimated, or other tax of any
kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
"Unpatented Mining Claims" means the unpatented mining
claims owned by SELLER that are located in Cochise County,
Arizona and which are more particularly described in Part 3 of
Exhibit "A" attached hereto.
"Water Rights, Wells, and Agreements" means the water
rights, wells, and agreements owned by SELLER in Cochise County,
Arizona that are associated with the Mining Property and which
are more particularly described in Part 5 of Exhibit "A" attached
hereto.
"363 Motion" means a motion to be filed by ARIMETCO in the
Reorganization Case requesting that the Bankruptcy Court
authorize, conduct, and approve a 363 Sale of the Johnson Camp
Property in accordance with the terms of this Agreement, and
which motion shall be undertaken and noticed in accordance with
the requirements of the Code.
"363 Sale" shall mean a public auction sale of the Johnson
Camp Property conducted by the Bankruptcy Court in the
Reorganization Case pursuant to Code 363(f) and pursuant to
which the court shall authorize and approve the sale of the
Johnson Camp Property to the bidder presenting the best bid as
determined by the Bankruptcy Court.
I.2 Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, and the
term "including" is not limiting. The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision
of this Agreement. Section, subsection, clause, schedule, and
exhibit references refer to this Agreement unless otherwise
specified. Any reference in this Agreement to this Agreement
shall include all written alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions,
and supplements, thereto and thereof, as applicable.
II. PURCHASE AND SALE OF THE JOHNSON CAMP PROPERTY.
2.1 Transfer of the Johnson Camp Property at Closing. Upon
the terms, subject to the conditions, and in reliance upon the
representations, warranties, and covenants set forth in this
Agreement, SELLER shall sell and convey to SUMMO and SUMMO agrees
to purchase from SELLER, the Johnson Camp Property on the Closing
upon payment of the Purchase Price.
2.2 Sale of Assets. Subject to the terms and conditions
set out in this Agreement, SELLER hereby agrees to sell the
Johnson Camp Property to SUMMO pursuant to a 363 Sale for the
total purchase price of TWO MILLION NINE HUNDRED FIFTY THOUSAND
AND NO/100 DOLLARS ($2,950,000.00). As further consideration for
the purchase of the Johnson Camp Property, SUMMO shall assume the
existing environmental liabilities with respect to the Johnson
Camp Property.
2.3 Conduct of 363 Sale. The sale of the Johnson Camp
Property shall be undertaken pursuant to a 363 Motion and shall
be accomplished pursuant to the 363 Sale. Except for Permitted
Encumbrances and liabilities under Contracts being assumed and
assigned to SUMMO pursuant to the terms of this Agreement, the
Johnson Camp Property shall be sold free and clear of any and all
other Liens, interests (as used in Section 363 of the Code),
claims, or encumbrances of any type or nature, to the maximum
extent permitted by the Code. All such Liens, interests, claims
and encumbrances shall attach only to the sale proceeds with the
same priority, dignity, validity, and effect as they attached to
the Johnson Camp Property. In addition to any requirements
imposed by the Bankruptcy Code and the Bankruptcy Court for the
conduct of the 363 Sale, the 363 Sale shall be subject to the
following conditions:
(a) Public Sale. The 363 Sale shall be a public
sale at which parties other than SUMMO shall be allowed
to bid. Seller shall take the steps necessary or
appropriate as ordered by the Bankruptcy Court to
advertise the 363 Sale. All expenses of advertising
the 363 Sale shall be paid by Seller.
(b) Opening Bid. The opening bid at the 363 Sale
shall be the bid of SUMMO which shall consist of the
Purchase Price together with the terms and conditions
of the transaction as set forth in this Agreement.
(c) Right of SUMMO to Bid. Nothing contained in
this Agreement shall preclude or restrict SUMMO from
increasing the Purchase Price as part of the bidding
process at the 363 Sale.
(d) Identification of Bidders. All bidders shall
be required to identify their principals, and to
disclose to the Bankruptcy Court, SUMMO and any other
bidders whether the bidder or any of its principals are
insiders of Seller, as that term is defined in 11
U.S.C. 101(31) or have any other relationship with
Seller.
(e) Title. Title to the Johnson Camp Property
shall be conveyed pursuant to an Order entered by the
Bankruptcy Court approving the 363 Sale free and clear
of all liens, claims, interests and encumbrances
(except for Permitted Encumbrances) pursuant to 11
U.S.C. 363 and pursuant to conveyance documents which
are executed pursuant thereto.
2.4 Transfer of Rights and Obligations. If the
transactions contemplated by this Agreement are consummated in
accordance with the provisions of this Agreement, the ownership
of the Johnson Camp Property shall be transferred from SELLER to
SUMMO at the Closing. Subject only to the terms of this
Agreement, SELLER shall be entitled to all of the rights, and
shall be subject to all of the duties and obligations, of such
ownership up to and including the Closing, and SUMMO shall be
entitled to all of the rights, and shall be subject to all of the
duties and obligations, of such ownership after the Closing. In
particular, until the occurrence of the Closing, SELLER shall be
entitled to all monies payable under any contract, agreement or
lease pertaining to the Johnson Camp Property. In addition, the
sale of the Mining Property shall be subject to any contract for
the purchase and removal of waste rock from the Mining Property,
and SELLER shall be entitled to all proceeds of any such contract
for waste rock removed prior to the date of Closing, whether such
proceeds are payable before or after Closing. Any such contract
entered into after the date of execution of this Agreement shall
not extend past the date of Closing. Any such contract entered
into before the date of execution of this Agreement and which
extends past the date of Closing shall be assigned to SUMMO at
the Closing. SELLER warrants that no such contract is subject to
Section 365 of the Code. If the result of the 363 Sale is that
SUMMO is not the purchaser of the Johnson Camp Property, then
this Agreement shall terminate, and except as otherwise expressly
provided herein, neither SELLER nor SUMMO shall have any further
rights or obligations hereunder.
2.5 Payment of Purchase Price.
(a) The purchase price shall be paid as follows:
$ 90,000.00 on or before five calendar (5) days
after the date of this Agreement;
$ 30,000.00 on or before one (1) month after
the Effective Date and a like amount on
or before the same day of each month
thereafter until the date of the Closing
or the date of SUMMO's termination of
this Agreement, whichever date first
occurs;
$1,950,000.00 at Closing less all amounts
previously paid;
$1,000,000.00 out of production as more
particularly provided in Exhibit "K"
"Grant of Production Payment."
(b) If, after the payment of any amount required
by the foregoing subparagraph (a) to be paid prior to
Closing, a stay is entered in connection with an appeal
of the Bankruptcy Court Order, SUMMO may by notice to
SELLER elect to terminate this Agreement and ARIMETCO
shall thereupon refund to SUMMO all amounts previously
paid to SELLER under the foregoing subsection (a).
2.6 Employees. All persons employed by SELLER at or in
connection with the Johnson Camp Property shall remain the
employees of SELLER. SUMMO has no obligation to assume any
employment contract, collective bargaining agreement, or other
similar agreement relating to the employment of persons at or in
connection with the Johnson Camp Property. SELLER shall be
responsible for providing any required plant closing or other
similar notices to their employees. SUMMO shall have the right,
but not the obligation, to offer employment to some or all
persons presently employed at or in connection with the Johnson
Camp Property, but the terms of such employment shall be at
SUMMO's sole discretion.
2.7 Representations and Warranties of SUMMO. SUMMO
represents and warrants to SELLER as follows:
(a) That it is a corporation duly incorporated
and in good standing in its state of incorporation and
that it 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) That it has the capacity to enter into and
perform this Agreement and all transactions
contemplated herein and that all corporate and other
actions required to authorize it to enter into and
perform this Agreement have been properly taken.
(c) That it shall not breach any other agreement
or arrangement by entering into or performing this
Agreement.
(d) That this Agreement has been duly executed
and delivered by it and is valid and binding upon it in
accordance with its terms.
(e) SUMMO's acquisition of the Johnson Camp
Property pursuant to the terms of this Agreement and
all other agreements and documents necessary to
consummate this transaction is in good faith, as that
phrase is used in Code Section 363(m).
2.8 Representations and Warranties of ARIMETCO. ARIMETCO
represents and warrants to SUMMO as follows:
(a) That it is a corporation duly incorporated
and in good standing in its state of incorporation and
that it 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) In all respects material to the Johnson Camp
Property, to SELLER's knowledge and except as disclosed
on Exhibit" L," SELLER is not in default under any law
or regulation, or under any order of any court, or
federal, state, municipal, or other governmental
department, commission, board, bureau, agency, or
instrumentality and, except to the extent set forth on
Exhibit "L," there are (1) no claims, actions, suits,
or proceedings instituted or filed, or (2) to the
knowledge of SELLER, no claims, actions, suits, or
proceedings threatened presently or which in the future
may be threatened against or affecting SELLER at law or
equity, or before or by any federal, state, municipal,
or other governmental department, commission, board,
bureau, agency, or instrumentality.
(c) That, subject to Bankruptcy Court approval,
it has the capacity to enter into and perform this
Agreement and all transactions contemplated herein and
that all corporate and other actions required to
authorize it to enter into and perform this Agreement
have been properly taken.
(d) That it shall not breach any other agreement
or arrangement by entering into or performing this
Agreement.
(e) That, subject to Bankruptcy Court approval,
this Agreement has been duly executed and delivered by
it and is valid and binding upon it in accordance with
its terms.
(f) SELLER carries insurance, which it believes
to be adequate in character and amount, with reputable
insurers in respect of the Johnson Camp Property and
such insurance policies are in full force and effect.
SELLER shall, within ten (10) days after the Effective
Date, provide SUMMO with certificates of such
insurance.
2.9 Covenants of SUMMO.
(a) SUMMO shall take or cause to be taken all
actions necessary or advisable to consummate the
transactions contemplated by this Agreement and to
assure that, as of the Closing, it shall not be under
any material corporate, legal, governmental or
contractual restriction that would prohibit or delay
the timely consummation of such transactions.
2.10 Covenants of ARIMETCO.
(a) Prior to Closing, SELLER shall: (i) carry on
operations on the Mining Property as it has heretofore
and shall not introduce any material new method of
management or operation; (ii) maintain the Johnson Camp
Property in as good working order and condition as at
present, ordinary wear and tear excepted; (iii) perform
all material obligations under agreements relating to
or affecting the Johnson Camp Property; and (iv) keep
in full force and effect present insurance policies or
other comparable insurance coverage. Without limiting
the generality of the foregoing, SELLER shall maintain
the circulation of all heap leach solutions in order to
prevent the build-up of such solutions and their
overflow from the pond.
(b) Prior to Closing, SELLER shall not: (i) with
respect to the Johnson Camp Property enter into any
contract or commitment (except the waste rock
contract(s) mentioned in Section 2.4) or incur or agree
to incur any liability except in the normal course of
business; (ii) create, assume, or permit to exist any
mortgage, pledge, or other lien or encumbrance upon the
Johnson Camp Property except those that already exist;
or (iii) sell, assign, lease, or otherwise transfer or
dispose of any portion of the Johnson Camp Property
except in the ordinary course of business or except
pursuant to the 363 Sale.
(c) SELLER shall take or cause to be taken all
actions necessary or advisable to consummate the
transactions contemplated by this Agreement (including
the filing and prosecution of motions under Code
Sections 363 and 365 in the Bankruptcy Case) and to
assure that as of the Closing it shall not be under any
material corporate, legal, governmental or contractual
restriction that would prohibit or delay the timely
consummation of such transactions.
2.11 Due Diligence.
(a) The parties acknowledge and agree that
SUMMO's purchase shall be based on SUMMO's independent
investigation, inspection, examination, analysis,
testing and evaluation of and pertaining to the Johnson
Camp Property and, in that regard, SUMMO acknowledges
and confirms that SELLER has not made any
representations or warranties with respect to the
nature, condition or status of the Johnson Camp
Property other than those which are set forth and
contained in this Agreement. SUMMO acknowledges the
Johnson Camp Property is being sold in "AS IS"
condition without warranty, expressed or implied except
as specifically set forth herein.
(b) Accordingly, SUMMO and its lenders shall have
up to one hundred fifty (150) days after the Effective
Date within which to conduct their due diligence
investigation of the Johnson Camp Property. During
this period, SELLER shall permit representatives of
SUMMO and its lenders to have free and unrestricted
access to the Johnson Camp Property and to all Books,
Records, and Accounts of SELLER, wherever located,
relating to the Johnson Camp Property. The
representatives of SUMMO and its lenders shall have the
right to explore, sample, and test the Mining Property
by drilling, geophysical and geochemical surveys, or
other methods; provided, however, that such due
diligence investigation shall be conducted in
accordance with all applicable laws and provided,
further, that promptly after completion of any such
activity, SUMMO shall return the Mining Property to
essentially its prior condition. SUMMO's obligation to
restore the Mining Property to its prior condition
shall continue in full force and effect and shall
survive any termination of this Agreement.
(c) SUMMO shall exercise all due diligence in
safeguarding and maintaining as confidential all data
or information acquired during its due diligence
investigation, and all such data and information shall
be subject to the Confidentiality Agreement and SUMMO
shall not disclose any such information to any person
unless such person is subject to and bound by the
Confidentiality Agreement; provided, however, that
notwithstanding any other provision, the requirement
for confidentiality shall be subject to the following
exceptions:
(i) A disclosure to (1) an entity to
which the rights of SUMMO have been assigned
pursuant to Section 3.4(a) or a nominee of
SUMMO under Section 3.4(b), including but not
limited to the lenders of such entity or
nominee; (2) any public or private financing
agency or institution or financier; (3) any
contractor or subcontractor that SUMMO (its
assignee or nominee) engages to assist it
with its due diligence; and (4) employees and
consultants of SUMMO (its assignee or
nominee) including attorneys, auditors,
bankers, and other advisors. In any such
case only such confidential information as
such third party shall have a legitimate
business need to know shall be disclosed.
Before SUMMO makes any disclosure pursuant to
this subsection (i), the third party shall
first agree in writing to protect the
confidential information from further
disclosure to the same extent as SUMMO is
obligated hereunder.
(ii) Confidential information that
otherwise comes into the public domain.
(iii) Confidential information that
is required, in the opinion of counsel for
SUMMO (its parent, assignee, or nominee), to
be disclosed to any federal, state, or local
government or appropriate agencies and
departments thereof or that is required, in
the opinion of such counsel, to be publicly
announced, to the extent required by law.
(iv) Confidential information required
to be disclosed pursuant to the rules or
regulations of a stock exchange or similar
trading market applicable to SUMMO or its
parent.
(d) SUMMO or its lenders shall bear all costs of
its due diligence investigation, including the costs of
any exploration, sampling, and testing; shall obtain
all permits required for its due diligence
investigation; and shall conduct its due diligence
investigation in a manner so as not to interfere with
the normal business operations.
(e) SUMMO waives and releases all claims against
SELLER, its directors, officers, employees, and agents
for injury to or death of persons or damage to property
caused directly or indirectly by SUMMO's due diligence
investigation except such as may result from SELLER's
negligence or willful misconduct. SUMMO shall indemnify
and hold SELLER, its directors, officers, employees,
and agents harmless from and against all claims, costs,
expenses, actions, suits, proceedings, losses, damages
and liabilities, including but not limited to
reasonable attorneys' fees and expenses, caused
directly or indirectly by SUMMO's performance of its
due diligence investigation of the Johnson Camp
Property. This release and indemnity shall continue in
full force and effect and shall survive any termination
of this Agreement and the purchase of the Johnson Camp
Property.
2.12 Closing.
(a) Subject to Bankruptcy Court approval of this
Agreement and the transactions contemplated hereby and
confirmation of the 363 Sale to SUMMO as the successful
bidder, and unless stayed by an order of the Bankruptcy
Court or appellate court having jurisdiction over this
matter, and unless the parties agree that the Closing
of the sale of the Johnson Camp Property to SUMMO shall
take place at some other time and place, the Closing
shall take place at the office of Streich Lang, P.A.,
at One South Church Avenue, Suite 1700, Tucson, Arizona
85701, at 10:00 o'clock a.m. on the tenth (10th)
business day after the completion of the due diligence
period.
(b) The Escrow Agent shall act as closing agent
and escrow agent under this Agreement.
2.13 Conditions Precedent to Obligations of SELLER at
Closing. The obligations of SELLER to sell the Johnson Camp
Property to SUMMO at Closing are conditioned on the following all
having occurred on or before the Closing:
(a) The representations and warranties of SUMMO
contained in this Agreement shall be true and correct
in all material respects at and as of the Closing as
though then made, and SUMMO shall have performed all of
the covenants required to be performed by it pursuant
to this Agreement prior to the Closing.
(b) SUMMO shall have delivered to SELLER a
resolution authorizing the execution, delivery, and
performance of this Agreement by SUMMO, certified by
the secretary of SUMMO to have been duly adopted by the
Board of Directors of SUMMO and to be in full force and
effect as of the Effective Date.
(c) SELLER shall have obtained the Bankruptcy
Court Order and such Order shall be a Final Order.
(d) No state, federal or foreign statute, rule,
regulation or action shall exist or shall have been
adopted or taken and no judicial or administrative
decision shall have been entered (whether on a
preliminary or final basis), that would prohibit,
restrict or unreasonably delay the consummation of the
transactions contemplated by this Agreement or make
illegal the payments due under this Agreement.
(e) SUMMO shall have delivered to SELLER all of
the following items:
(i) a duly executed Assumption
Agreement substantially in the form attached
hereto as Exhibit "E";
(ii) a duly executed Non-Foreign
Affidavit substantially in the form attached
hereto as Exhibit "G";
(iii) a duly-executed Environmental
Indemnification Agreement in form and
substance satisfactory to SUMMO and SELLER;
and
(iv) the cash portion of the Purchase
Price less any amounts previously paid
pursuant to Section 2.5.
2.14 Conditions Precedent to Obligations of SUMMO at
Closing. The obligations of SUMMO at Closing are conditioned on
the following having occurred on or before the Closing:
(a) The representations of ARIMETCO contained in
this Agreement shall be true and correct in all
material respects at and as of the Closing as though
then made, and SELLER shall have performed all of the
covenants required to be performed by it pursuant to
this Agreement prior to the Closing.
(b) SELLER's title to the Mining Property shall
be good and marketable.
(c) With respect to the Johnson Camp Property,
all mining claims maintenance fees accruing prior to
the date of Closing, and all insurance premiums
accruing on or before the date of the Closing, shall
have been paid by SELLER.
(d) SELLER shall have obtained all consents
required to be obtained by SELLER to transfer the
Johnson Camp Property to SUMMO.
(e) ARIMETCO shall have delivered to SUMMO a
resolution authorizing the execution, delivery, and
performance of this Agreement by ARIMETCO, certified by
the secretary of ARIMETCO to have been duly adopted by
the Board of Directors of ARIMETCO and to be in full
force and effect as of the Effective Date.
2.15 Obligations of SELLER at Closing. At the Closing,
SELLER shall deliver to SUMMO:
(a) A special warranty deed substantially in the
form of Exhibit "I" attached hereto conveying the
Mining Property to SUMMO.
(b) A bill of sale substantially in the form of
Exhibit "J" attached hereto conveying the Personal
Property to SUMMO.
(c) An assignment substantially in the form of
Exhibit "E" attached hereto assigning (to the extent
that the same are assignable) the contracts to SUMMO.
(d) Certificates of Title, to the extent
available, for all vehicles or equipment included in
Personal Property, properly executed by ARIMETCO.
(e) Such other deeds or assignments, in such form
as may be appropriate, which may be necessary or
convenient to completely transfer the Johnson Camp
Property to SUMMO.
2.16 Obligations of SUMMO at Closing. At Closing, SUMMO
shall:
(a) Pay SELLER ONE MILLION NINE HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($1,950,000.00), less
amounts previously paid under Section 2.5, "Payment of
Purchase Price," by cashier's check or wire transfer.
Of this amount, the Escrow Agent shall retain
$375,000.00 until the completion of the inventory and
adjustment as provided in Section 2.20.
(b) Deliver to SELLER a Grant of Production
Payment substantially in the form of Exhibit "K"
attached hereto and incorporated by reference herein.
2.17 Recording Fees and Transfer Taxes. SUMMO shall pay all
recording fees and documentary transfer taxes.
2.18 Allocation of Taxes. Taxes for the current year
assessed on SELLER's interest in the Johnson Camp Property,
including severance and transaction privilege taxes, shall be pro-
rated between SELLER and SUMMO as of the date of Closing.
2.19 Utility Refunds. No agreements or contracts in
existence at the Closing relating to utility refunds, deposit
returns or otherwise are included in the transactions provided
for in this Agreement, and SUMMO shall have no right, title or
interest therein or in any monies now or hereafter due SELLER
thereunder. All refunds, credits, and discounts of any nature
received by or accruing to the benefit of SUMMO at any time after
the Closing relative to the Johnson Camp Property or any part
thereof or to any utility for any part of the Johnson Camp
Property that were earned or agreed to prior to Closing shall be
immediately remitted by SUMMO to SELLER in cash.
2.20 Post Closing Inventory. SUMMO shall have five (5)
calendar days after the date of Closing in which to inventory the
Personal Property listed on Exhibit "B." Any shortfall disclosed
by such inventory shall be compensated at the as is fair market
value (not replacement cost) of such missing items out of the
amount retained by the Escrow Agent as provided in Section
2.16(a), provided, however, that there shall be no adjustment of
the Purchase Price for any items or class of items that have a
fair market value of $1000.00 or less.
2.21 Access After Closing. At the SELLER's expense, SELLER
may retain copies of any Books, Records and Accounts. After the
Closing, SUMMO shall, at SELLER's expense and upon forty-eight
(48) hours' advance notice to SUMMO, provide SELLER and the
Committee with reasonable access to the SELLER's records acquired
by SUMMO hereunder, in connection with any reasonable business or
bankruptcy purpose of SELLER or the Committee, as the case may
be. SUMMO covenants to maintain SELLER's records for two (2)
years following the Closing.
2.22 Post-Closing Removal of Excluded Assets. All assets
located at the Mining Property that are not included in the sale
of the Johnson Camp Property to SUMMO (hereinafter the "Excluded
Assets") shall remain the property of SELLER, and SELLER shall
have up to ninety (90) days after the Closing (the "Removal
Period") to remove the Excluded Assets from the Mining Property.
In addition, at any time during the Removal Period, SELLER may
conduct at the Mining Property a public sale or sales of the
Excluded Assets. All Excluded Assets not removed within the
Removal Period shall become the property of SUMMO.
III. MISCELLANEOUS.
3.1 Termination by SUMMO. SUMMO may at any time prior to
the Closing terminate this Agreement by delivering to SELLER or
by filing for record in the appropriate office (with a copy to
SELLER) a recordable Surrender of this Agreement. Upon mailing
the Surrender to SELLER or to the appropriate office, all rights,
liabilities, and obligations of SUMMO under this Agreement shall
terminate. Upon such termination, SELLER shall retain all
amounts theretofore paid under Section 2.5, "Payment of Purchase
Price."
3.2 Termination by SELLER. If SUMMO shall fail to make any
payment when due under Section 2.5(a) within ten (10) days after
SELLER's written notice to SUMMO of such default, or if SUMMO
shall be in default of any obligation under Section 2.12(b)
regarding the conduct of its due diligence and shall fail to
initiate and diligently pursue steps to cure such default within
thirty (30) days after SELLER's written notice to SUMMO of such
default, then upon the expiration of such period SELLER may, by
written notice to SUMMO, terminate this Agreement.
Notwithstanding the foregoing, in the event of the prospect of
immediate and/or irreparable harm to the Johnson Camp Property
and/or any threat to the health, safety and/or welfare of any
person, nothing herein shall preclude SELLER from immediately
seeking and obtaining any appropriate relief or remedy from the
Bankruptcy Court in the Reorganization Case.
3.3 Notices. All notices and other communications to any
party shall be in writing and shall be sufficiently given if
(i) delivered in person; (ii) sent by electronic facsimile
communication, with confirmation sent by registered or certified
mail, return receipt requested; or (iii) sent by registered or
certified mail, return receipt requested. All notices shall be
effective and shall be deemed delivered (i) if by personal
delivery, on the date of delivery; (ii) if by electronic
facsimile communication, on the date of receipt of the
communication; and (iii) if by mail, on the date of mailing.
Until a change of address is communicated as indicated above, all
notices to ARIMETCO shall be addressed:
ARIMETCO, INC.
335 North Wilmot Road, Suite 400
Tucson, Arizona 85711
FAX: (520) 748-2826
Attn: John McKinney
and all notices to SUMMO shall be addressed:
SUMMO USA CORPORATION
1776 Lincoln Street, Suite 900
Denver, Colorado 80203
FAX: (303) 863-1736
Attn: James D. Frank
3.4 Assignment; Nominee.
(a) The rights of SUMMO under this Agreement may
be assigned to an Affiliate of SUMMO; provided,
however, that any such assignment shall not release
SUMMO from any obligations and liabilities hereunder.
(b) Subject to SELLER's written consent (which
consent shall be in SELLER's sole and absolute
discretion), SUMMO may designate a nominee to take
title to the Johnson Camp Property, and in such case
the transfer documents shall name said nominee as the
transferee.
3.5 Inurement. All covenants, conditions, limitations, and
provisions contained in this Agreement apply to and are binding
upon the parties to this Agreement, their heirs, representatives,
successors, and assigns.
3.6 Force Majeure.
(a) If SUMMO or SUMMO's lender shall be prevented
by Force Majeure from timely performance of its due
diligence under Section 2.12, "Due Diligence," the
period for performance of such due diligence shall be
extended for an additional period equal to the duration
of the Force Majeure. In no event shall the total of
all such extensions exceed thirty (30) days. Upon the
occurrence and upon the termination of any Force
Majeure, SUMMO shall promptly notify SELLER. SUMMO
shall use reasonable diligence to remedy a Force
Majeure, but shall not be required against its better
judgment to settle any labor dispute or contest the
validity of any law or regulation or any action or
inaction of civil or military authority.
(b) "Force Majeure" means any cause beyond SUMMO's reasonable
control, including law or regulation; action or inaction of civil
or military authority; inability to obtain any license, permit,
or other authorization that may be required to conduct due
diligence on or in connection with the Johnson Camp Property;
unusually severe weather; fire; explosion; flood; insurrection;
riot; labor dispute; inability after diligent effort to obtain
workmen or material; delay in transportation; acts of God.
3.7 Attorneys' Fees. If arbitration or legal action is
instituted by either party to enforce the terms of this Agreement
or to recover damages for the breach of any of the provisions of
this Agreement, the prevailing party shall be entitled to receive
from the other party reasonable attorneys' fees to be determined
by the arbitrator(s) or the court in which the action is brought.
3.8 Modification. No modification, variation, or amendment
of this Agreement shall be effective unless it is in writing and
is signed by all parties to this Agreement.
3.9 Waiver. Any party to this Agreement may, in its sole
and absolute discretion, waive any term or provision of this
Agreement that is in its favor and/or for its benefit. No waiver
of any provision of this Agreement, or waiver of any breach of
this Agreement, shall be effective unless the waiver is in
writing and is signed by the party against whom the waiver is
claimed. No waiver of any breach shall be deemed to be a waiver
of any other or subsequent breach.
3.10 Entire Agreement. This Agreement sets forth the entire
agreement of the parties and supersedes all previous and
contemporaneous agreements, representations, warranties, and
undertakings, written or oral.
3.11 Construction.
(a) The paragraph headings are for convenience
only, and shall not be used in the construction of this
Agreement.
(b) The invalidity of any provision of this
Agreement shall not affect the enforceability of any
other provision of this Agreement.
(c) In the event of any conflict between this
Agreement and any Exhibit attached hereto, the terms of
this Agreement shall be controlling.
3.12 Governing Law. THE VALIDITY OF THIS AGREEMENT AND ALL
OTHER DOCUMENTS EXECUTED AND DELIVERED HEREWITH, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA
(INCLUDING THE BANKRUPTCY CODE), IT BEING THE INTENT OF THE
PARTIES THAT FEDERAL LAW SHALL GOVERN THE RIGHTS AND DUTIES OF
THE PARTIES HERETO WITHOUT REGARD TO THE APPLICATION OF ANY
PROVISION OF STATE LAW. TO THE EXTENT THAT FEDERAL LAW WOULD
APPLY THE LAW OF ANY STATE AS THE FEDERAL RULE FOR THE PURPOSES
OF THIS AGREEMENT, THE PARTIES AGREE THAT THE LAWS OF THE STATE
OF ARIZONA SHALL BE USED TO SUPPLEMENT APPLICABLE FEDERAL LAW.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE BANKRUPTCY COURT. SUMMO AND SELLER WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 3.12.
SUMMO AND SELLER HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. SUMMO AND SELLER REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
3.13 Short Form. Contemporaneously herewith ARIMETCO and
SUMMO have executed and delivered a Short Form of this Agreement.
SUMMO may record the Short Form or this Agreement, or both, as it
may elect.
3.14 Additional Documents. If conditions change by reason
of acquisitions, conveyances, assignments, or other matters
relating to the title to or description of the Johnson Camp
Property, ARIMETCO and SUMMO shall execute amendments of this
Agreement, and any other documents which may be necessary to
reflect such changed conditions. After the Closing, SELLER shall
provide SUMMO with such deeds, assignments, or other additional
documents as may be necessary to carry out the purposes of this
Agreement, including any documents that may be necessary to
effect assignment of BLM Rights-of-Way, State of Arizona Rights-
of-Way, and permits, plans of operations, and other
authorizations from governmental authorities relating to the
Johnson Camp Property.
3.15 Closing Documents, Motions, and Related Matters. The
documents to be exchanged at Closing, and motions and related
papers to be filed, executed or delivered pursuant hereto shall
be subject to the reasonable approval of counsel to the
respective parties.
3.16 Press Releases. Neither party shall issue any press
release without providing the other party a copy of the proposed
release at least 24 hours prior to its issuance. Any objections
to the accuracy of such press release not made prior to the
issuance thereof shall be deemed waived.
3.17 Counterparts; Telefacsimile Execution. This Agreement
may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement
by telefacsimile shall be equally as effective as delivery of a
manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver a manually executed counterpart
of this Agreement but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 15th day of September, 1998.
ARIMETCO, INC.,
a Nevada corporation
By: /s/ Gregory A. Hahn By: /s/ John McKinney
Gregory A. Hahn John McKinney
Its President Its Senior Vice President
EXHIBIT 10.124 AMENDMENT OF SALE AND PURCHASE AGREEMENT
(Johnson Camp Mine)
THIS AMENDMENT OF SALE AND PURCHASE AGREEMENT is made by and
among ARIMETCO, INC., a Nevada corporation, ("ARIMETCO" or
"SELLER"); and SUMMO USA CORPORATION, a Colorado corporation
("SUMMO"), whose address is 1776 Lincoln Street, Suite 900,
Denver, Colorado 80203.
RECITALS
A. ARIMETCO and SUMMO entered into a certain Sale and
Purchase Agreement (the "Agreement") executed September 15, 1998,
effective September 18, 1998.
B. ARIMETCO and SUMMO desire to amend the Agreement in
certain particulars.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions contained in this Amendment, the
parties agree as follows:
1. Effective Date of Amendment. The effective date of this
Amendment ("Effective Date of Amendment") shall be the date of
entry of the Bankruptcy Court Order approving this Amendment.
2. Due Diligence Period. The first sentence of Section
2.11(a) of the Agreement is amended to read as follows:
Accordingly, SUMMO and its lenders shall have up
to two hundred forty (240) days after the Effective
Date, or ninety (90) days after the Effective Date of
Amendment, whichever period ends later, within which to
conduct their due diligence investigation of the
Johnson Camp Property.
3. Transfer of Rights and Obligations. Section 2.4 of the
Agreement is amended to read as follows:
2.4 Transfer of Rights and Obligations.
(a) If the transactions contemplated by this
Agreement are consummated in accordance with the
provisions of this Agreement, the ownership of the
Johnson Camp Property shall be transferred from SELLER
to SUMMO at the Closing. Subject only to the terms of
this Agreement, SELLER shall be entitled to all of the
rights, and shall be subject to all of the duties and
obligations, of such ownership up to and including the
Closing, and SUMMO shall be entitled to all of the
rights, and shall be subject to all of the duties and
obligations, of such ownership after the Closing. In
particular, except as provided in the following
subparagraphs (b) through (d), until the occurrence of
the Closing, SELLER shall be entitled to all monies
payable under any contract, agreement or lease
pertaining to the Johnson Camp Property.
(b) Seller shall have the right to enter into a
contract for the purchase and removal of waste rock
from the Mining Property, provided that--
(i) such contract (1) shall give the
contractor the exclusive right to remove waste
rock from the Mining Property, (2) shall be for a
period not to exceed five years, (3) shall provide
for the removal of a minimum of 25,000 tons of
waste rock per year, and (4) shall provide for a
payment by the contractor of not less than $0.50
per ton of waste rock removed;
(ii) the contractor shall conduct all
operations on the Mining Property in a good and
workmanlike manner and in accordance with accepted
practice;
(iii) the contractor shall conducts its
operations in accordance with all applicable laws,
shall be responsible for obtaining all
environmental and other permits necessary for the
excavation and removal of such waste rock, and
shall perform all reclamation and rehabilitation
required by such permits or by law; and
(iv) the contractor shall conduct its
operations so as not to hinder unreasonably the
operations of SELLER or SUMMO on the Mining
Property.
(c) Such contract and the contractor under such
contract shall be subject to SUMMO's approval, which
shall not be unreasonably withheld or delayed. No such
approval by SUMMO shall constitute a representation or
warranty by SUMMO regarding the title to the property
from which the waste rock is to be removed.
(d) The first $50,000 paid with respect to any
contract year under such contract shall be paid to
SELLER; all additional amounts under such contract
shall be paid to SUMMO.
4. Payment of Purchase Price. The third payment item of
Section 2.5(b) of the agreement is amended to read as follows:
$1,950,000 at Closing less (i) all amounts
previously paid by SUMMO to ARIMETCO
under this Agreement, and (ii) the
amount paid or agreed to be paid by
SUMMO to Cyprus Mines Corporation for
the Section 25 Land, which amount shall
not exceed $30,000 without the agreement
of SUMMO and ARIMETCO.
5. Obligations of Seller at Closing. Section 2.15 of the
Agreement is amended by redesignating subparagraph (e) as
subparagraph (f) and by adding new subparagraph (e) to read as
follows:
(e) A quitclaim deed in proper form quitclaiming
to SUMMO all of ARIMETCO's right, title, and interest,
if any, in the property more particularly described as
follows:
Township 15 South, Range 22 East, G&SRB&M
Cochise County, Arizona
Section 25: Lot 15, 16, and 19
containing 112.32 acres, more or less
and herein referred to as the "Section 25 Land". It is
understood that such quitclaim deed shall not be subject to
the provisions of Section 363 of the Code.
6. Notices. Section 3.3 of the Agreement is amended to
change the address for Arimetco to read as follows:
ARIMETCO, INC.
c/o STREICH LANG
One South Church Ave.
Suite 1700
Tucson, AZ 85701-1621
Attn: Steven R. Haydon, Esq.
7. Ratification. The parties hereby ratify and confirm the
Agreement as amended.
IN WITNESS WHEREOF, the parties have executed this
Amendment as of the 19th day of January 1999.
SUMMO USA CORPORATION, ARIMETCO, INC.
a Colorado corporation a Nevada corporation
By: /s/ Gregory A. Hahn By: /s/ John McKinney
Gregory A. Hahn John McKinney
President Senior Vice President
STATE OF COLORADO )
) ss:
County of Denver )
The foregoing instrument was acknowledged before me this
19th day of January, 1999, by Gregory A. Hahn, as the President
of Summo USA Corporation, a Colorado corporation, the corporation
named in and that executed the foregoing instrument, on behalf of
the corporation.
/s/ Michelle Herbert
Notary Public
My Commission Expires:
March 18, 1999
[SEAL]
STATE OF ARIZONA )
) ss:
County of Pima )
The foregoing instrument was acknowledged before me this
22nd day of January, 1999, by John McKinney, as the Senior Vice
President of Arimetco, Inc., a Nevada corporation, the
corporation named in and that executed the foregoing instrument,
on behalf of the corporation.
/s/ Estela Vargas-Rangel
Notary Public
My Commission Expires:
October 26, 2000
[SEAL]
EXHIBIT 10.125 SECOND AMENDMENT OF SALE AND PURCHASE AGREEMENT
(Johnson Camp Mine)
THIS SECOND AMENDMENT OF SALE AND PURCHASE AGREEMENT is made
by and among ARIMETCO, INC., a Nevada corporation, ("ARIMETCO" or
"SELLER"); and SUMMO USA CORPORATION, a Colorado corporation
("SUMMO"), whose address is 1776 Lincoln Street, Suite 900,
Denver, Colorado 80203.
RECITALS
A. ARIMETCO and SUMMO entered into a certain Sale and
Purchase Agreement (the "Agreement") executed September 15, 1998,
effective September 18, 1998.
B. ARIMETCO and SUMMO entered into a certain Amendment of
Sale and Purchase Agreement (the "Amendment") executed January
19, 1999, effective February 24, 1999.
C. SUMMO has paid ARIMETCO $240,000 pursuant to the first
and second payment items of Section 2.5(a) of the Agreement.
D. Subject to Bankruptcy Court approval, ARIMETCO and SUMMO
desire to further amend the Agreement in certain particulars.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and conditions contained in this Second
Amendment, and subject to Bankruptcy court approval, the parties
agree as follows:
1. Effective Date of Amendment. The effective date of this
Second Amendment ("Effective Date of Second Amendment") shall be
the date of entry of the Bankruptcy Court Order approving this
Second Amendment.
2. Sale of Assets. Section 2.2 of the Agreement is amended
by deleting the words and figures "TWO MILLION NINE HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($2,950,000.00)" and substituting
therefor the words and figures "THREE MILLION ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($3,100,000.00)".
3. Payment of Purchase Price. The third payment item of
Section 2.5(a) of the Agreement is amended to read as follows:
$1,860,000 (the "Remaining Cash Portion of the Purchase
Price") with interest thereon, as follows:
$310,000 at Closing (which includes $60,000
to be paid pursuant to the first and
second payment items of Section 2.5(a)
of the Agreement) less the amount paid
or agreed to be paid by SUMMO to Cyprus
Mines Corporation for the Section 25
Land, which amount shall not exceed
$30,000 without the agreement of SUMMO
and ARIMETCO.
$500,000 on or before June 4, 2000, together
with interest on the unpaid amount of
the Remaining Cash Portion of the
Purchase Price at the rate of eight
percent (8%) per annum payable quarterly
from the date of Closing
$500,000 on or before June 4, 2001, together
with interest on the unpaid amount of
the Remaining Cash Portion of the
Purchase Price at the rate of eight
percent (8%) per annum payable quarterly
from the date of Closing
$550,000 on or before June 4, 2002, together
with interest on the unpaid amount of
the Remaining Cash Portion of the
Purchase Price at the rate of eight
percent (8%) per annum payable quarterly
from the date of Closing
4. Closing. Section 2.12(a) of the Agreement is amended by
deleting the words "the tenth (10th) business day after the
completion of the due diligence period" and substituting therefor
the words "within two (2) business days after the entry of the
Bankruptcy Court's order approving this Second Amendment".
5. Obligations of SUMMO at Closing. Section 2.16 of the
Agreement is amended to read as follows:
2.16 Obligations of SUMMO at Closing. At Closing SUMMO
(or, in the event of an assignment of SUMMO's rights under this
Agreement as provided in Section 3.4, SUMMO's Assignee) shall:
(a) Pay SELLER THREE HUNDRED TEN AND NO/100
DOLLARS ($310,000), by cashier's check or wire
transfer.
(b) Deliver to SELLER a Grant of Production
Payment substantially in the form of Exhibit "K"
attached hereto and incorporated by reference herein.
(c) Execute and deliver to Arimetco (i) a
promissory note in the amount of the unpaid amount of
the Remaining Cash Portion of the Purchase Price
together with interest thereon, and (ii) lien documents
granting liens against and security interests in the
Johnson Camp Property that shall be in form and
substance wholly satisfactory to SELLER and shall
include requirements that will enable SELLER to monitor
on an ongoing basis SUMMO's commitments to the mine,
such as the payment of taxes, the maintenance of
permits, and the payment of utilities and other holding
costs associated with the mine. The parties hereto
agree that Cochise County, Arizona will retain its lien
on the Johnson Camp Property until the lien is paid in
full. Accordingly, the parties shall establish in the
note and the lien documents a mechanism to ensure that
so long as such lien remains on the Johnson Camp
Property, the monies to be paid to SELLER hereunder are
paid to Cochise County to satisfy its lien. Except for
the lien of Cochise County, the liens and security
interests of Arimetco shall be first priority liens and
security interests against the Johnson Camp Property.
(d) Unless SUMMO has assigned its rights under
this Agreement to NORD as provided in Section 3.4, a
Guaranty in form and substance satisfactory to Arimetco
whereby NORD and its Affiliates guarantee the
obligations of SUMMO or SUMMO's Assignee under the
above-mentioned note and lien documents.
6. Post Closing Inventory. Section 2.20 of the Agreement
is amended by deleting the words and figures "amount retained by
the Escrow Agent as provided in Section 2.16(a)" and substituting
therefor the words and figures "unpaid amount of the Remaining
Cash Portion of the Purchase Price, the amount so retained to be
credited against the payments thereafter falling due under
Section 2.5(a)".
7. Assignment. Section 3.4(a) of the Agreement is amended
to read as follows:
The rights of SUMMO under this Agreement may be
assigned to an Affiliate of SUMMO, to Nord Resources
Corp., a Delaware corporation ("NORD"), or to an
affiliate of NORD. For the purposes of this Section,
the term "affiliate of NORD" shall have the meaning set
out in Section 1.1, "Affiliate", with the word "Nord"
substituted for the word "SUMMO". No such assignment
shall release SUMMO from any obligations and
liabilities under this Agreement.
8. Ratification. The parties hereby ratify and confirm the
Agreement as heretofore amended and as hereby amended.
IN WITNESS WHEREOF, the parties have executed this
Amendment as of the 26th day of May 1999.
SUMMO USA CORPORATION, ARIMETCO, INC.
a Colorado corporation a Nevada corporation
By: /s/ Gregory A. Hahn By: /s/ H. Roy Shipes
Gregory A. Hahn H. Roy Shipes
President President
STATE OF COLORADO )
) ss:
County of Denver )
The foregoing instrument was acknowledged before me this
26th day of May, 1999, by Gregory A. Hahn, as the President of
Summo USA Corporation, a Colorado corporation, the corporation
named in and that executed the foregoing instrument, on behalf of
the corporation.
/s/ Michelle Herbert
Notary Public
My Commission Expires:
March 18, 2003
[SEAL]
STATE OF ARIZONA )
) ss:
County of Pima )
The foregoing instrument was acknowledged before me this
27th day of May, 1999, by H. Roy Shipes, as the President of
Arimetco, Inc., a Nevada corporation, the corporation named in
and that executed the foregoing instrument, on behalf of the
corporation.
/s/ Maureen Brady Thompson
Notary Public
My Commission Expires:
September 29, 2001
[SEAL]
EXHIBIT 10.126
THIS ACQUISITION AGREEMENT made as of the 4th day of June, 1999.
A M O N G:
NORD RESOURCES CORPORATION
a corporation incorporated pursuant to the laws of
the State of Delaware
("Nord Resources") OF THE FIRST PART
- and -
NORD COPPER CORPORATION.
a corporation incorporated pursuant to the laws of
the State of Delaware
("Nord Copper") OF THE SECOND PART
-and-
SUMMO USA CORPORATION
a corporation incorporated pursuant to the laws of the
State of Colorado
("Summo") OF THE THIRD PART
WHEREAS Summo executed and delivered and is a party to the
Arimetco Agreement (as hereinafter defined) and among other
things, Summo seeks to sell, transfer and assign and Nord Copper
seeks to assume and purchase the Arimetco Agreement, all on and
subject to the terms and conditions herein contained;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of
the mutual covenants, agreements and premises herein contained
and other good and valuable consideration (the receipt and
sufficiency whereof being hereby acknowledged by each party), the
parties hereto do hereby covenant and agree as follows:
DEFINITIONS AND SCHEDULES
1.1 Definitions. In this Agreement:
"Act" has the meaning ascribed thereto in subsection 2.3(b).
"Agreement", "this Agreement", "hereto" and "herein" means
this Agreement and all schedules attached hereto, as may be
amended from time to time.
"Arimetco" means Arimetco Inc.
"Arimetco Agreement" means the agreement to purchase the
Johnson Camp Mine and the related assets between Summo and
Arimetco, dated September 18, 1998, as amended February 24,
1999 and May 26, 1999.
"Best Knowledge" means such knowledge as the Party would
have after due inquiry of the matter in question.
"Business Day" means a day other than a Saturday or a Sunday
or any other day which is a statutory holiday in the State
of Colorado.
"Closing" means the consummation of the Transaction as
herein contemplated.
"Closing Date" means June 4, 1999 or such other date as the
Parties may agree upon.
"Consent Order" means the Consent Order negotiated between
Summo, the Arizona Department of Environmental Quality and
the State of Arizona Attorney General, or a similarly
acceptable document to Nord Copper, which documents the
manner in which Summo (or Nord Copper) will proceed with
operation of the Johnson Camp Mine, while addressing and
remedying the deficiencies for which the project has been
deemed to be out of compliance.
"Contract" means any agreement, indenture, contract, bond,
debenture, security agreement, lease, deed of trust,
license, option, instrument or other legally binding
commitment, whether written or oral.
"Direct Claim" has the meaning ascribed thereto in
subsection 6.3.
"Encumbrances" means any and all claims, liens, security
interests, mortgages, pledges, charges, options, equity
interests, encumbrances, proxies, voting agreements, voting
trusts, leases, tenancies, easements or other interests of
any nature or kind whatsoever, howsoever created.
"Financial Statements" has the meaning ascribed thereto in
subsection 3.1(t).
"Indemnified Party" has the meaning ascribed thereto in
subsection 6.3.
"Indemnifying Party" has the meaning ascribed thereto in
subsection 6.3.
"Intellectual Property" means any and all intellectual
property prepared by or on behalf of Summo with respect to
the Johnson Camp Mine including without limitation all
feasibility studies and the intellectual property listed on
Schedule A.
"Johnson Camp Mine" means the property located in Cochise
County, comprising 88 unpatented lode claims, 64 patented
lode claims and approximately 510 acres of fee simple lands,
all as more particularly described in the Arimetco Agreement
"Laws" means all applicable federal, state, municipal or
local laws, statutes, by-laws or ordinances in effect on the
Closing Date.
"Losses" means any and all claims, demands, debts, suits,
actions, obligations, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including,
without limitation, all reasonable legal and other
professional fees and disbursements, interest, penalties and
amounts paid in settlement).
"Nord Copper" means Nord Copper Corporation.
"Nord Resources" means Nord Resources Corporation.
"Nord Resources Stock" means 1,600,000 common shares of Nord
Resources Stock.
"Parties" means collectively, the parties to this Agreement.
"Person" means any individual, partnership, company,
corporation, unincorporated association, joint venture,
trust, the Crown or any other agency or instrumentality
thereof or any other judicial entity or person, government
or governmental agency, authority or entity howsoever
designated or constituted.
"Summo" means Summo USA Corporation.
"Survival Period" has the meaning ascribed thereto in
subsection 5.1.
"Third Party Claim" has the meaning ascribed thereto in
subsection 6.3.
"Threshold" has the meaning ascribed thereto in subsection 6.3.
"Time of Closing" means 11:00 a.m. (Tucson time) on the
Closing Date or if the Transaction is not completed at such
time, then such other time on the Closing Date on which the
Transaction is completed.
"Transaction" means the sale, transfer and assignment of the
Arimetco Agreement and the Intellectual Property from Summo
to Nord Copper as contemplated by this Agreement.
1.2 Disclosure. Any fact or circumstance or combination of
facts and/or circumstances disclosed in this Agreement or in any
schedules hereto shall be deemed to be disclosed for all purposes
of this Agreement.
1.3 Act. Any reference in this Agreement to any act, by-law,
rule or regulation or to a provision thereof shall be deemed to
include a reference to any act, by-law, rule or regulation or
provision enacted in substitution or amendment thereof.
1.4 Colorado Time. Except where otherwise expressly provided in
this Agreement any reference to time shall be deemed to be a
reference to Colorado time.
1.5 Gender and Extended Meanings. In this Agreement words and
personal pronouns relating thereto shall be read and construed as
the number and gender of the party or parties referred to in each
case require and the verb shall be construed as agreeing with the
required word and pronoun. For greater certainty and without
limitation, in this Agreement the word "shall", has the same
meaning as the word "will".
1.6 Section Headings. The division of this Agreement into
sections is for convenience of reference only and shall not
effect the interpretation or construction of this Agreement.
1.7 Business Day. In the event that the date for the taking of
any action under this Agreement falls on a day which is not a
Business Day, then such action shall be taken on the next
following Business Day.
ACQUISITION AGREEMENT
2.1 Transfer of Arimetco Agreement. Subject to the terms and
conditions hereof, on the Closing Date at the Time of Closing,
Summo shall sell, transfer and assign to Nord Copper and Nord
Copper shall purchase and assume from Summo, all the right, title
and interest of Summo in and to the Arimetco Agreement and the
Intellectual Property, free and clear of all Encumbrances other
than as provided in this Agreement, in exchange for the Nord
Resources Stock. Nord Resources does hereby undertake and agree
to use its good faith commercial best efforts to have the Nord
Resources Stock registered for trading with the Securities &
Exchange Commission as and by way of the filing of a registration
statement at such time and as and when Nord Resources next
registers a new issue of securities all in accordance with that
form of Registration Rights Agreement attached hereto as Schedule
B. For greater certainty and without limitation, Nord Copper does
hereby covenant and agree to pay to Cochise County,
contemporaneous with Closing, the sum of US$310,000 on account of
monies owing to Arimetco under the Arimetco Agreement, including
the sum of US$60,000, US$30,000 of which became due on March 17,
1999 and of which US$30,000 became due on April 17, 1999.
2.2 Closing. Closing shall occur at the Time of Closing on the
Closing Date at the offices of Streich Lang or at such other
place or other time and date as the Parties may agree.
2.3 Deliveries at Closing. At Closing,
(a) Summo Deliveries.
Summo will deliver to Nord Copper the following:
(a) Executed and acknowledged (where necessary) originals of all
of the agreements referred to in section 7.1;
(b) An executed Registration Rights Agreement in the form of
Schedule B;
(c) Certificates of good standing for Summo from the Secretary
of State of the States of Colorado and Arizona; and
(d) The other documents referred to in section 7.1.
(b) Nord Copper and Nord Resources Deliveries.
Nord Copper and Nord Resources will deliver to Summo the following:
(a) A certificate or certificates representing the Nord
Resources Stock in Summo's name and bearing the following legend:
"The shares represented by this Certificate have
not been registered under the Securities Act of
1933, as amended (the "Act"), or under the
securities laws of any other state or
jurisdiction, and are "restricted securities" as
that term is defined in Rule 144 under the Act and
may not be sold, transferred, assigned, pledged or
hypothecated except pursuant to an effective
registration statement or an opinion of counsel
reasonably satisfactory to Nord Resources
Corporation to the effect that registration under
the Act (and applicable state securities laws) is
not required."
(b) Executed and acknowledged (where necessary) originals of all
of the agreements referred to in section 8.1.
(c) An executed Registration of Rights Agreement in the form of
Schedule B.
(d) Certificates of good standing for Nord Resources from the
Secretary of State of the State of Delaware and for Nord Copper
from the Secretary of State of the State of Delaware.
(e) The other documents referred to in section 7.1.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF SUMMO
3.1 Covenants, Representations and Warranties. Summo hereby
covenants, represents and warrants to Nord Copper as follows and
acknowledges and confirms that Nord Copper is relying upon such
covenants, representations and warranties in connection with the
Transaction:
(a) Incorporation and Organization. Summo is duly incorporated
and validly subsisting under the laws of the State of Colorado
and has the corporate power to own or lease its properties and to
carry on its business as it is now being conducted and to
execute, deliver and perform its obligations under this
Agreement. Summo has all requisite corporate power and authority
to enter into this Agreement and to perform its obligations
hereunder.
(b) Acts of Bankruptcy. Summo is not insolvent, has not
proposed a compromise or arrangement to its creditors generally,
has not taken any proceeding with respect to a compromise or
arrangement, has not taken any proceeding to have itself declared
bankrupt or wound-up, has not taken any proceeding to have a
receiver appointed of any part of its assets and at present, no
encumbrancer or receiver has taken possession of any of its
property and no execution or distress is enforceable or levied
upon any of its property and no petition for a receiving order in
bankruptcy is filed against it.
(c) Corporate and Shareholder Authority. All requisite
corporate and shareholder actions have been taken by Summo to
authorize the valid execution and delivery of this Agreement and
the consummation of the Transaction. Summo has obtained all
consents, approvals and authorizations of, and has effected all
filings with, regulatory authorities that are required in
connection with the consummation of the Transaction.
(d) Agreement Enforceable. This Agreement constitutes a valid
and legally binding obligation of Summo enforceable against Summo
in accordance with its terms.
(e) No Violations. The execution and delivery of this Agreement
and all other agreements contemplated herein by Summo and the
observance and performance of the terms and provisions of this
Agreement and any such agreements; (i) does not and will not
require Summo to obtain or make any consent, authorization,
approval, filing or registration under any law, by-law, rule,
regulation, judgment, order, writ, injunction or decree which is
binding upon Summo other than as contemplated in this Agreement;
(ii) does not and will not constitute a violation or breach of
the charter documents or by-laws of Summo; (iii) does not and
will not constitute a violation or breach of applicable Laws, a
provision of any Contract to which Summo is a party or by which
Summo is bound or any Law, rule, regulation, judgment, order,
writ, injunction or decree applicable to Summo; (iv) does not and
will not constitute a default (nor would with the passage of time
or the giving of notice or both or otherwise, constitute a
default) under any Contract, to which Summo is a party or by
which Summo is bound; and (v) does not and will not result in the
creation or imposition of an Encumbrance on the Arimetco
Agreement, any of the assets covered thereby or the Intellectual
Property, other than as specified in the Arimetco Agreement.
(f) Litigation. There is not pending, or, to the Best Knowledge
of Summo, threatened or contemplated any suit, action, legal
proceeding, litigation or governmental investigation of any sort
relating to Summo or the Arimetco Agreement nor is there any
present state of facts or circumstances which can be reasonably
anticipated to be a basis for any such suit, action, legal
proceeding, litigation or governmental investigation nor is there
presently outstanding against Summo any judgment, decree,
injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator, other than
ongoing U.S. Bankruptcy proceedings of Arimetco, pursuant to
which Summo has entered into the Arimetco Agreement.
(g) Exclusive Rights to Dispose. Summo has the exclusive right
to dispose of good and marketable title to the Arimetco Agreement
and the Intellectual Property, free and clear of all Encumbrances
and other than as herein provided, the Arimetco Agreement is not
subject to any contractual rights of Persons other than Summo and
Summo has not done or omitted to do anything which has resulted
or could result in an Encumbrance on, or which could permit any
third Person to claim an interest in, the Arimetco Agreement
and/or the Intellectual Property except as otherwise disclosed in
this Agreement or otherwise resulting from the U.S. Bankruptcy
proceedings.
(h) Payments. All work on or in respect of the Johnson Camp
Mine and/or the Intellectual Property done by or on behalf of
Summo including for greater certainty and without limitation, by
third Persons, has been or will be fully paid by Summo.
(h) Knowledge of Summo. Summo does not have any knowledge
and/or information with respect to the Johnson Camp Mine that has
not been communicated or made available to Nord Copper. For
greater certainty and without limitation, Summo has not received
any notice of; (i) any non-compliance of the Johnson Camp Mine
or the improvements or fixtures located thereon, or the operation
or maintenance thereof, with municipal, building or zoning by-
laws or regulations; or (ii) any work orders relating to, or
notices from any government authorities advising of any defects
in, the construction or state of repair of any improvements or
fixtures on the Johnson Camp Mine; which notices have not been
complied with. Summo's covenant, representation and warranty
regarding such notice does not apply to any notice received by
Arimetco, which may be in the project files in Summo's offices or
in the Johnson Camp Mine files located at the mine site, and
which may be referenced in the Consent Order, all of which have
been made available to Nord Copper.
(j) Arimetco Agreement. The Arimetco Agreement is a legal,
valid, binding and enforceable agreement of Summo and has not
been materially amended other than as appears in the second
amendment to the Arimetco Agreement, entered into at the request
of Nord Copper and to the Best Knowledge of Summo, no default
exists thereunder on the part of Arimetco. On the date hereof,
save and except for the payment of US$60,000, US$30,000 of which
became due on March 17, 1999 and of which US$30,000 became due on
April 17, 1999. Summo has complied with and performed all of its
covenants and obligations under the Arimetco Agreement, including
for greater certainty and without limitation, save and except as
aforementioned, the payment of all option payments, charges and
expenses owing by Summo thereunder.
(k) No Liabilities. There are no liabilities of Summo for which
Nord Copper may be liable on or after the completion of the
Transaction other than liabilities disclosed in this Agreement
and those specifically forming a part of the Arimetco Agreement.
(l) Condition of Assets. To the Best Knowledge of Summo, all
tangible assets which are the subject matter of the Arimetco
Agreement are in good condition, repair and proper working order,
subject to normal wear and tear and are fit and appropriate for
use for the purpose for which they were intended.
(m) Intellectual Property Rights. The Intellectual Property is
owned by Summo and does not infringe upon the intellectual
property rights of any other Person.
(n) No Options. No Person other than under this Agreement has
any agreement or option or any right capable of becoming an
agreement or option for the purchase from Summo of the Arimetco
Agreement and/or the Intellectual Property and/or the Permits.
(o) Environmental Matters. Other than that which has been
disclosed to Nord Copper and which is referenced in the Consent
Order, to the Best Knowledge of Summo the Johnson Camp Mine and
the operations thereat and their existing and prior uses comply
with any applicable, federal, state, municipal or local Laws,
regulations, requirements, orders or approvals of all
governmental authorities relating to environmental, dangerous
goods and occupational health and safety matters. To the Best
Knowledge of Summo, there are no expropriation, condemnation or
similar proceedings, actual or threatened, of which Summo has
received notice, against any part or parts of the Johnson Camp
Mine. To the Best Knowledge of Summo no contaminant has been
released, spilled, leaked, discharged, disposed of, pumped,
poured, emitted, emptied, injected, leached, dumped or allowed to
escape ("Release") at, on or under the Johnson Camp Mine contrary
to any applicable environmental Law, no part of the Johnson Camp
Mine is located within an environmentally sensitive area or fill
regulated area and there are no environmental charges, privileges
or Encumbrances relating to the Johnson Camp Mine. Summo knows
of no facts or circumstances related to environmental matters
with respect to the Johnson Camp Mine that could lead to any
environmental claims, liabilities or responsibilities.
(p) Employment. Summo is not a party to any written or oral
employment, agreement with respect to the Johnson Camp Mine.
(q) Disclosure. Summo has disclosed, granted access to or made
available to Nord Resources for inspection and review all
information, data and files relevant to the Arimetco Agreement,
the Intellectual Property and the Johnson Camp Mine, which
information, data and files are not inaccurate or untrue in any
material respects, when viewed in the aggregate.
(r) No Brokers. All negotiations relating to this Agreement and
the Transaction have been carried on by Summo directly with Nord
Copper without the intervention of any other Person on behalf of
Summo in such manner as to give rise to any valid claim against
Nord Copper for a brokerage commission, finder's fee or other
like payment and Summo will indemnify and save harmless Nord
Copper and from any such claim.
(s) Investment Intent. Summo is acquiring the Nord Resources
Stock solely for the purpose of investment and not with a view to
the distribution or sale of any part thereof. Summo acknowledges
that the Nord Resources Stock has not been registered under the
Securities Act or any state securities law and is being issued
and sold in reliance on exemptions from such registration
requirements that are available only if the Nord Resources Stock
is not being offered to the public and is being acquired for
investment and not with a present view to its distribution or
sale.
(t) Private Placement Representations.
(i) (A) Summo can bear the economic risk of losing its
entire investment in the Nord Resources Stock and can
afford to hold the Nord Resources Stock for an
indefinite period of time;
(B) Summo is an Accredited Investor as defined in Rule 501(a) of
Regulation D of the Securities Act.
(ii) Summo has received, read, reviewed and is familiar with Nord
Resources' audited, consolidated financial statements for the
financial year ended December 31, 1998 (the "Financial
Statements"), and confirms that all requested documents, records
and books pertaining to its investment in Nord Resources have
been made available or delivered to it.
(iii) Summo has had the opportunity to ask questions of and
receive answers from officers of Nord Resources concerning its
investment in the Nord Resources Stock and additional information
necessary to verify the accuracy of the information contained in
the Financial Statements.
(u) Omissions and Misrepresentations. None of the foregoing
covenants, representations and warranties knowingly contains any
untrue statement of material fact or knowingly omits to state any
material fact necessary to make any such covenant, warranty or
representation not misleading.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF NORD COPPER AND
NORD RESOURCES
4.1 Covenants, Representations and Warranties. Nord Copper
and Nord Resources hereby covenant, represent and warrant to
Summo as follows and acknowledge and confirm that Summo is
relying upon such covenants, representations and warranties in
connection with the Transaction:
(a) Incorporation and Organization. Each of Nord Copper and
Nord Resources is duly incorporated and validly subsisting under
the laws of the State of Delaware and has the corporate power to
own or lease its respective properties and to carry on its
respective business as it is now being conducted and to execute,
deliver and perform its respective obligations under this
Agreement. Each of Nord Copper and Nord Resources has all
requisite corporate power and authority to enter into this
Agreement and to perform its respective obligations hereunder.
(b) Acts of Bankruptcy. Neither Nord Copper nor Nord Resources
is insolvent, has proposed a compromise or arrangement to its
creditors generally, has taken any proceeding with respect to a
compromise or arrangement, has taken any proceeding to have
itself declared bankrupt or wound-up, has taken any proceeding to
have a receiver appointed of any part of its respective assets
and at present, no encumbrancer or receiver has taken possession
of any of its respective property and no execution or distress is
enforceable or levied upon any of its respective property and no
petition for a receiving order in bankruptcy is filed against it.
(c) Corporate and Shareholder Authority. All requisite
corporate and shareholder actions have been taken or by the
Closing Date shall have been taken by each of Nord Copper and
Nord Resources to authorize the valid execution and delivery of
this Agreement and the consummation of the Transaction. Each of
Nord Copper and Nord Resources has obtained all consents,
approvals and authorizations of, and has effected all filings
with, regulatory authorities that are required in connection with
the consummation of the Transaction.
(d) Agreement Enforceable. This Agreement constitutes a valid
and legally binding obligation of each of Nord Copper and Nord
Resources enforceable against each of Nord Copper and Nord
Resources in accordance with its terms.
(e) No Violations. The execution and delivery of this Agreement
and all other agreements contemplated herein by each of Nord
Copper and Nord Resources and the observance and performance of
the terms and provisions of this Agreement and any such
agreements; (i) does not and will not require Nord Copper or Nord
Resources to obtain or make any consent, authorization, approval,
filing or registration under any law, by-law, rule, regulation,
judgment, order, writ, injunction or decree which is binding upon
Nord Copper or Nord Resources other than as contemplated in this
Agreement; (ii) does not and will not constitute a violation or
breach of the charter documents or by-laws of Nord Copper or Nord
Resources; (iii) does not and will not constitute a violation or
breach of applicable Laws, a provision of any Contract to which
Nord Copper or Nord Resources is a party or by which Nord Copper
or Nord Resources is bound or any Law, rule, regulation,
judgment, order, writ, injunction or decree applicable to Nord
Copper or Nord Resources; (iv) does not and will not constitute a
default (nor would with the passage of time or the giving of
notice or both or otherwise, constitute a default) under any
Contract, to which Nord Copper or Nord Resources is a party or by
which Nord Copper or Nord Resources is bound; and (v) does not
and will not result in the creation or imposition of an
Encumbrance on the Nord Resources Stock.
(f) Litigation. There is not pending, or, to the Best Knowledge
of Nord Copper and Nord Resources, threatened or contemplated any
suit, action, legal proceeding, litigation or governmental
investigation of any sort relating to Nord Copper or Nord
Resources nor is there any present state of facts or
circumstances which can be reasonably anticipated to be a basis
for any such suit, action, legal proceeding, litigation or
governmental investigation nor is there presently outstanding
against Nord Copper or Nord Resources any judgment, decree,
injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator.
(g) Nord Resources Stock. On Closing, the Nord Resources Stock
will be validly created, reserved and allotted for issuance and
upon issuance to Summo in accordance with the terms and
conditions of this Agreement, will be validly issued and
outstanding, fully paid and non-assessable.
(h) No Options. No Person other than under this Agreement has
any agreement or option or any right capable of becoming an
agreement or option for the purchase from Nord Resources of the
Nord Resources Stock.
(i) Regulatory Status. Nord Resources is a registrant with the
Securities and Exchange Commission in the United States of
America. Nord Resources has duly made on a timely basis all
filings required to be made under all applicable securities laws
and is presently in good standing with respect to filings with
the Securities and Exchange Commission.
(j) Audited Financial Statements. The audited consolidated
financial statements of Nord Resources for the financial year
ended December 31, 1998 present fairly the financial condition
and results of operations of Nord Resources as at such date and
for the period then ended and have been prepared in accordance
with United States generally accepted accounting principles
applied on a consistent basis, except as otherwise stated in the
notes to such financial statements. Since December 31, 1998,
there has been no material adverse change in the business,
operations, properties, assets or condition, financial or
otherwise, of Nord Resources on a consolidated basis from that
shown in the audited consolidated financial statements of Nord
Resources as at December 31, 1998.
(k) Public Disclosure Information. All information and
documents publicly disclosed by Nord Resources during the past
two years, including financial statements, fairly and accurately
represent in all material respects the business and affairs of
Nord Resources as at the respective times of disclosure.
(l) No Brokers. All negotiations relating to this Agreement and
the Transaction have been carried on by Nord Copper and Nord
Resources directly with Summo without the intervention of any
other Person on behalf of Nord Copper and Nord Resources in such
manner as to give rise to any valid claim against Summo for a
brokerage commission, finder's fee or other like payment and Nord
Copper and Nord Resources will indemnify and save harmless Summo
from any such claim.
(m) Omissions and Misrepresentations. None of the foregoing
covenants, representations and warranties knowingly contains any
untrue statement of material fact or knowingly omits to state any
material fact necessary to make any such covenant, warranty or
representation not misleading.
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Survival. No investigations made by or on behalf of
any Party at any time shall have the effect of waiving,
diminishing the scope of or otherwise affecting any covenant,
representation or warranty made by any Party. No waiver by any
Party of any condition, in whole or in part, shall operate as a
waiver of any other condition. The covenants, representations
and warranties contained in Article 3 and 4 respectively or in
any certificate or other document delivered in connection with
the Closing shall survive the making of this Agreement and the
Closing for a period of two years (the "Survival Period")
provided, however, that if a claim for a breach of any such
covenant, representation or warranty is brought prior to the
expiration of the applicable Survival Period such covenant,
representation or warranty shall, for the purposes of such claim,
survive the applicable Survival Period until such claim is
finally resolved and all obligations with respect thereto have
been fully satisfied.
INDEMNITY
6.1 Indemnity of Nord Copper and Nord Resources. Summo
agrees to indemnify and save harmless Nord Copper and Nord
Resources from all Losses actually incurred by Nord Copper and
Nord Resources as a result of any breach by Summo or any
inaccuracy of any covenant, representation or warranty of Summo
contained in this Agreement.
6.2 Indemnity of Summo. Nord Copper and Nord Resources
agree to indemnify and save harmless Summo from all Losses
actually incurred by Summo as a result of any breach by Nord
Copper or Nord Resources or any inaccuracy of any covenant,
representation or warranty of Nord Copper and Nord Resources
contained in this Agreement.
6.3 Notice of Claims. In the event that a Party (the
"Indemnified Party") shall become aware of any Loss in respect of
which the other Party (the "Indemnifying Party") agreed to
indemnify the Indemnified Party pursuant to this Agreement (the
"Indemnification Claim"), the Indemnified Party shall promptly
give written notice thereof to the Indemnifying Party. Such
notice shall specify whether the Indemnification Claim arises as
a result of a claim by a Person against the Indemnified Party (a
"Third Party Claim") or whether the Loss does not so arise (a
"Direct Claim") and shall also specify with reasonable
particularity (to the extent that the information is available)
the factual basis for the Indemnification Claim and the amount of
the Loss if known. If through the fault of the Indemnified Party
the Indemnifying Party does not receive notice of any
Indemnification Claim in time to contest effectively the
determination of any liability susceptible of being contested,
the Indemnifying Party shall be entitled to set off against the
amount claimed by the Indemnified Party the amount of any Losses
incurred by the Indemnifying Party resulting from the Indemnified
Party's failure to give such notice on a timely basis.
6.4 Investigation of Claims. With respect to any Direct
Claim, following receipt of notice from the Indemnified Party of
the Indemnification Claim, the Indemnifying Party shall have 60
days to make such investigation of the Indemnification Claim as
is considered necessary or desirable. For the purpose of such
investigation, the Indemnified Party shall make available to the
Indemnifying Party the information relied upon by the Indemnified
Party to substantiate the Indemnification Claim, together with
all such other information as the Indemnifying Party may
reasonably request. If both Parties agree at or prior to the
expiration of such 60 day period (or any mutually agreed upon
extension thereof) to the validity and amount of such
Indemnification Claim, the Indemnifying Party shall immediately
pay to the Indemnified Party the full agreed upon amount of the
Indemnification Claim, failing which the matter shall be
determined by a court of competent jurisdiction.
6.5 Supplemental Rights. The rights and benefits provided
in this Article are supplemental to and are without prejudice to
any other rights, actions or causes of action which may arise
pursuant to any other section of this Agreement or pursuant to
applicable Law.
CONDITIONS PRECEDENT TO NORD COPPER' S AND NORD RESOURCES'
OBLIGATIONS AT CLOSING
7.1 Conditions Precedent. All obligations of Nord Copper
to purchase and assume the Arimetco Agreement and to purchase the
Intellectual Property at Closing under this Agreement are subject
to the fulfillment (or waiver in writing by Nord Copper and Nord
Resources) prior to or at the Closing of each of the following
conditions:
(a) Covenants, Representations and Warranties. The covenants,
representations and warranties made by Summo under this Agreement
shall be true in all material respects on and as of the Closing
Date.
(b) Actions, Etc. All actions, proceedings, instruments and
documents required to carry out the Transaction and all other
related legal matters shall have been approved by Nord Copper and
Nord Resources and Nord Copper and Nord Resources shall have been
furnished with such certified copies of actions and proceedings
and other such instruments and documents as Nord Copper and Nord
Resources shall have reasonably requested.
(c) Assignment of Arimetco Agreement. Nord Copper and Summo
shall have executed and delivered an assignment and assumption
agreement of the Arimetco Agreement on terms and conditions
satisfactory to all parties. Arimetco and Summo shall have
executed an amendment of the Arimetco Agreement which shall
provide, among other things, that the Arimetco Agreement shall be
amended to provide that the remaining purchase price of
US$1,860,000 thereunder shall be payable as follows; (i)
US$310,000 on Closing; (ii) US$500,000 on June 4, 2000; (iii)
US$500,000 on June 4, 2001; (iv) US$550,000 on June 4, 2002; and
(v) interest paid quarterly at the rate of 8% per annum.
(d) Consent Order. The Director of the Arizona Department of
Environmental Quality shall have issued a consent order on terms
and conditions satisfactory to Nord Copper and Nord Resources, in
their sole discretion, relating to environmental remediation and
operating requirements.
(e) Compliance with Covenants. Summo shall have complied with
all covenants and agreements herein agreed to be performed or
caused to be performed by Summo.
(f) Approvals and Consents. At or before Closing there shall
have been obtained from all appropriate federal, state,
municipal, local or other governmental or administrative bodies
all such approvals and consents, if any, in form and on terms
satisfactory to Nord Copper and Nord Resources as may be required
in order to permit the completion of the Transaction as herein
contemplated.
(g) Corporate Authorizations. Summo shall have delivered to
Nord Copper and Nord Resources evidence satisfactory to Nord
Copper and Nord Resources that all necessary corporate
authorizations by Summo authorizing and approving the Transaction
have been obtained.
(h) Legal Opinion. Nord Copper and Nord Resources shall have
received a legal opinion from counsel to Summo on terms and
conditions satisfactory to Nord Copper and Nord Resources with
respect to Summo and the Transaction, subject only to reasonable
qualifications.
(i) No Orders. No order of any court or administrative agency
shall be in effect which restrains or prohibits the Transaction
and no suit, action, inquiry, investigation or proceeding in
which it will be or it is sought to restrain, prohibit or change
the terms of or obtain damages or other relief in connection with
the Transaction and which in the judgment of Nord Copper and
Nord Resources makes it inadvisable to proceed with the
consummation of the Transaction shall have been made, instituted
or threatened by any Person.
In case any of the foregoing conditions cannot be fulfilled at or
before the time of Closing to the satisfaction of Nord Copper and
Nord Resources, Nord Copper and Nord Resources may rescind this
Agreement by notice to Summo and in such event each of the
Parties shall be released from all obligations hereunder.
Provided however that any such conditions may be waived in whole
or in part by Nord Copper and Nord Resources without prejudice
to Nord Copper's and Nord Resources' rights of rescission in the
event of the non-fulfillment of any other condition or
conditions, any such waiver to be binding on Summo only if the
same is in writing.
CONDITIONS PRECEDENT TO SUMMO'S OBLIGATIONS AT CLOSING
8.1 Conditions Precedent. All obligations of Summo to sell,
transfer and assign the Arimetco Agreement and to sell the
Intellectual Property under this Agreement are subject to the
fulfillment (or waiver in writing by Summo prior to or at the
Closing of each of the following conditions:
(a) Covenants, Representations and Warranties. The covenants,
representations and warranties made by Nord Copper and Nord
Resources in or under this Agreement shall be true in all
material respects on and as of the Closing Date and Summo shall
have received from Nord Copper and Nord Resources a certificate
signed as of the Closing Date.
(b) Actions, Etc. All actions, proceedings, instruments and
documents required to carry out the Transaction including without
limitation, the issuance of the Nord Resources Stock and all
other related legal matters shall have been approved by Summo and
Summo shall have been furnished with such certified copies of
actions and proceedings and other such instruments and documents
as Summo shall have reasonably requested.
(c) Assignment of Arimetco Agreement. Nord Copper and Summo
shall have executed and delivered the assignment and assumption
agreement together with Arimetco as contemplated by section
7.1(c).
(d) Compliance with Covenants. Nord Copper and Nord Resources
shall have complied with all covenants and agreements herein
agreed to be performed or caused to be performed by Nord Copper
and Nord Resources.
(e) Approvals and Consents. At or before Closing there shall
have been obtained from all appropriate federal, state,
municipal, local or other governmental or administrative bodies
all such approvals and consents, if any, in form and on terms
satisfactory to Summo as may be required in order to permit the
completion of the Transaction as herein contemplated.
(f) Corporate Authorizations. Nord Copper and Nord
Resources shall have delivered to Summo evidence satisfactory to
Summo that all necessary corporate authorizations by Nord Copper
and Nord Resources authorizing and approving the Transaction have
been obtained.
(g) No Orders. No order of any court or administrative agency
shall be in effect which restrains or prohibits the Transaction
and no suit, action, inquiry, investigation or proceeding in
which it will be or it is sought to restrain, prohibit or change
the terms of or obtain damages or other relief in connection with
the Transaction and which in the judgment of Summo makes it
inadvisable to proceed with the consummation of the Transaction
shall have been made, instituted or threatened by any Person.
MISCELLANEOUS
9.1 Tender. Any tender of documents or money hereunder may be
made upon the Parties or upon their respective solicitors as set
forth herein
9.2 Closing. Any document, instrument or thing which is to be
delivered by either Party at the Closing shall be tabled at the
Closing at the place of closing by the Party which is to deliver
such document, instrument or thing, and any document, instrument
or thing so tabled by a Party shall;
(a) be deemed to have been delivered by such Party for
purposes of this Agreement;
(b) be held in escrow by the solicitor for such party
to be dealt with in accordance with subparagraphs (c)
and (d);
(c) be delivered to the Party to which it is to be
delivered pursuant to the terms hereof, if all
documents, instruments and things which are to be
delivered at the Closing are tabled in accordance with
the section at the Closing; and
(d) be delivered to, or in accordance with the
directions of the Party which tabled it, if
subparagraph (c) does not apply.
9.3 Costs. Except as otherwise expressly provided in this
Agreement, all legal, tax and other costs and expenses incurred
in connection with the preparation of this Agreement and the
consummation of the Transaction shall be paid by the Party
incurring such expenses.
9.4 Notice. All notices, requests, demands or other
communications by the Parties required or permitted to be given
by one Party to another shall be given in writing by personal
delivery, telecopy or by registered or certified mail, postage
prepaid, addressed, telecopied or delivered to such other Party
as follows:
(a) if to Nord Copper and Nord Resources:
Nord Resources Corporation
201 Third Street NW
Suite 1750
Albuquerque, New Mexico
U S A 87102
Attention: President
Facsimile: (505) 766-9922(b)
(b) if to Summo:
1776 Lincoln Street
Suite 900
Denver, Colorado
U S A 80203
Attention: President and Chief Executive Officer
Facsimile: (303) 863-1736
or at such other address or telecopier number as may be given by
any of them to the others in writing from time to time and such
notices, requests, demands or other communications shall be
deemed to have been received when delivered, if personally
delivered, on the date telecopied (with receipt confirmed) if
telecopied and received at or prior to 5:00 p.m. local time and,
if not, on the next Business Day, and if mailed, on the date
received as certified.
9.5 Further Assurances. The Parties shall sign such other
papers, cause such meetings to be held, resolutions passed and by-
laws enacted and exercise their vote and influence, do and
perform and cause to be done and performed such further and other
acts and things as may be necessary or desirable in order to give
full effect to this Agreement and every part hereof.
9.6 Laws. This Agreement shall be governed by the laws of the
State of Colorado, except for its rules as to conflict of law.
9.7 Time of the Essence. Time shall be of the essence of this
Agreement and of every part hereof and no extension nor variation
of this Agreement shall operate as a waiver of this provision.
9.8 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to all of the matters
herein. This Agreement supersedes any and all agreements,
understandings and representations made among the Parties prior
to the date hereof, This Agreement shall not be amended except
by a memorandum in writing signed by both Parties and any
amendment hereof shall be null and void and shall not be binding
upon any Party which has not given its consent as aforesaid.
9.9 Assignment. Neither Party may assign this Agreement or any
part hereof without the prior written consent of the other Party
which consent may be unreasonably withheld. Subject to the
foregoing, this Agreement shall enure to the benefit of and be
binding upon the Parties and their respective successors and
assigns, but no other Person.
9.10 Invalidity. In the event that any of the covenants,
representations and warranties or any portion of them contained
in this Agreement are unenforceable or are declared invalid for
any reason whatsoever, such unenforceability or invalidity shall
not affect the enforceability or validity of the remaining terms
or portions thereof contained in this Agreement and such
unenforceable or invalid, covenant, representation and warranty
or covenant or portion thereof shall be severable from the
remainder of this Agreement.
9.11 Counterpart. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original and such counterparts when taken together shall
constitute one and the same original agreement which shall be
binding on the Parties hereto.
9.12 No Public Announcement. No public announcement or press
release concerning the Transaction shall be made by any Party
except with the prior written consent of the other Parties,
acting reasonably except as may be required by federal,
provincial or state law or regulation or by any governmental
agency or by any exchange upon which the stock of Summo or Nord
Resources or any parent of Summo or Nord Resources may be traded.
IN WITNESS WHEREOF the Parties have duly executed this Agreement
as of the date and year first above written.
NORD COPPER CORPORATION
Per: /s/ Ray W. Jenner
VP-Finance
NORD RESOURCES CORPORATION
Per: /s/ Ray W. Jenner
VP-Finance
SUMMO USA CORPORATION
Per: /s/ James D. Frank
VP-Finance
EXHIBIT 10.127 PROMISSORY NOTE
$1,550,000.00 Tucson, Arizona
June 8, 1999
FOR VALUE RECEIVED, the undersigned NORD COPPER CORPORATION,
a Delaware corporation (hereinafter called "Maker"), promises to
pay to the order of ARIMETCO, INC. (the "Payee"; Payee and each
subsequent transferee and/or owner of this Note, whether taking
by endorsement or otherwise, are herein successively called
"Holder") at 7739 East Broadway, Suite 352, Tucson, Arizona 85710-
3947, or at such other place as Holder may from time to time
designate in writing, the principal sum of ONE MILLION FIVE
HUNDRED FIFTY THOUSAND AND NO 100/HUNDREDS DOLLARS
($1,550,000.00) plus interest calculated on a daily basis (based
on a 365-day year) from the date hereof on the principal balance
from time to time outstanding as hereinafter provided, principal,
interest and all other sums payable hereunder to be paid in
lawful money of the United States of America as follows:
A. Interest shall accrue at the rate of eight
percent (8%) per annum.
B. All accrued interest shall be due and payable
on the first day of every third month commencing
October 1, 1999.
C. In addition to accrued interest, repayment of
principal shall be due and payable as follows:
(i) $500,000.00 shall be due and
payable on June 8, 2000.
(ii) $500,000.00 shall be due and
payable on June 8, 2001.
(iii) $550,000.00 shall be due
and payable on June 8, 2002.
D. The entire unpaid principal balance, all
accrued and unpaid interest, and all other amounts
payable hereunder shall be due and payable in full on
June 8, 2002.
Subject to a determination by the Bankruptcy Court as to the
amount owed to Cochise County, Maker shall pay the amounts set
forth in C. above and the quarterly interest payments set forth
in B. above directly to the Cochise County, Arizona Treasurer
(the "Treasurer") in satisfaction of the tax liens outstanding on
the date hereof against the Johnson Camp Property ("Tax Liens")
so long as such Tax Liens remain outstanding. Upon payment in
full of the Tax Liens and release thereof, Maker shall pay the
remainder of the amounts due hereunder to Holder. Payment of
amounts represented hereby to the Treasurer in satisfaction of
the Tax Liens satisfies all obligations of the Maker to the
Holder hereunder. Contemporaneously with any payment to Cochise
County, Maker shall provide evidence of such payment to Payee.
Maker agrees to an effective rate of interest that is the rate
stated above plus any additional rate of interest resulting from
any other charges in the nature of interest paid or to be paid by
or on behalf of Maker, or any benefit received or to be received
by Holder, in connection with this Note.
If any payment required under this Note is not paid within
fifteen (15) days after the date such payment is due, then, at
the option of Holder, Maker shall pay a "late charge" equal to
three percent (3%) of the amount of that payment to compensate
Holder for administrative expenses and other costs of delinquent
payments. This late charge may be assessed without notice, shall
be immediately due and payable and shall be in addition to all
other rights and remedies available to Holder.
All payments on this Note shall be applied first to the
payment of any costs, fees or other charges incurred in
connection with the indebtedness evidenced hereby, next to the
payment of accrued interest and then to the reduction of the
principal balance.
This Note is issued pursuant to that Sale and Purchase
Agreement (Johnson Camp) dated September 15, 1998, by and between
Payee and Summo USA Corporation, as amended by an Amendment of
Sale and Purchase Agreement executed January 19, 1999, and
amended further by a Second Amendment of Sale and Purchase
Agreement executed May 26, 1999 (as amended the "Sale Agreement,
which has been assigned by Summo USA Corporation to Maker"), and
is secured by, among other things, a Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing of even date
herewith (the "Deed of Trust"), executed by Maker, as trustor, in
favor of Payee, as beneficiary, encumbering certain property
situate in Cochise County, Arizona as further described therein.
The Deed of Trust and all other documents or instruments securing
the indebtedness evidenced by this Note or executed or delivered
in connection with the indebtedness evidenced by this Note are
hereinafter called the "Security Documents."
Time is of the essence of this Note. At the option of
Holder, the entire unpaid principal balance, all accrued and
unpaid interest and all other amounts payable hereunder shall
become immediately due and payable without notice upon the
failure to pay any sum due and owing hereunder as provided herein
if such failure continues for ten (10) days after written notice
thereof to Maker or upon the occurrence of any Event of Default,
as defined in the Sale Agreement or any of the Security
Documents.
After maturity, including maturity upon acceleration, the
unpaid principal balance, all accrued and unpaid interest and all
other amounts payable hereunder shall bear interest at that rate
that is five percent (5%) above the rate that would otherwise be
payable under the terms hereof. Maker shall pay all reasonable
costs and expenses, including reasonable attorneys' fees and
court costs, incurred in the collection or enforcement of all or
any part of this Note. All such costs and expenses shall be
secured by the Deed of Trust and by all other Security Documents.
In the event of any court proceedings, court costs and attorneys'
fees shall be set by the court and not by jury and shall be
included in any judgment obtained by Holder.
Maker shall have the option to prepay this Note, in full or
in part, at any time without penalty. All prepayments shall be
applied in the inverse order of maturity or, at the option of
Holder, in the regular order of maturity.
Failure of Holder to exercise any option hereunder shall not
constitute a waiver of the right to exercise the same in the
event of any subsequent default or in the event of continuance of
any existing default after demand for strict performance hereof.
Maker and all sureties, guarantors and/or endorsers hereof
(or of any obligation hereunder) and accommodation parties hereon
(severally each hereinafter called a "Surety") each: (a) agree
that the liability under this Note of all parties hereto is joint
and several; (b) severally waive any homestead or exemption laws
and right thereunder affecting the full collection of this Note;
(c) severally waive any and all formalities in connection with
this Note to the maximum extent allowed by law, including (but
not limited to) demand, diligence, presentment for payment,
protest and demand, and notice of extension, dishonor, protest,
demand and nonpayment of this Note; and (d) consent that Holder
may extend the time of payment or otherwise modify the terms of
payment of any part or the whole of the debt evidenced by this
Note, at the request of any other person liable hereon, and such
consent shall not alter nor diminish the liability of any person
hereon.
In addition, each Surety waives and agrees not to assert:
(a) any right to require Holder to proceed against Maker or any
other Surety, to proceed against or exhaust any security for the
Note, to pursue any other remedy available to Holder, or to
pursue any remedy in any particular order or manner; (b) the
benefit of any statute of limitations affecting its liability
hereunder or the enforcement hereof; (c) the benefits of any
legal or equitable doctrine or principle of marshaling; (d)
notice of the existence, creation or incurring of new or
additional indebtedness of Maker to Holder; (e) the benefits of
any statutory provision limiting the liability of a surety,
including without limitation the provisions of Sections 12-1641,
et seq., of the Arizona Revised Statutes; (f) any defense arising
by reason of any disability or other defense of Maker or by
reason of the cessation from any cause whatsoever (other than
payment in full) of the liability of Maker for payment of the
Note; and (g) the benefits of any statutory provision limiting
the right of Holder to recover a deficiency judgment, or to
otherwise proceed against any person or entity obligated for
payment of the Note, after any foreclosure or trustee's sale of
any security for the Note, including without limitation the
benefits, if any, to a Surety of Arizona Revised Statutes Section
33-814. Until payment in full of the Note, no Surety shall have
any right of subrogation and each hereby waives any right to
enforce any remedy which Holder now has, or may hereafter have,
against Maker or any other Surety, and waives any benefit of, and
any right to participate in, any security now or hereafter held
by Holder.
Maker agrees that to the extent Maker or any Surety makes
any payment to Holder in connection with the indebtedness
evidenced by this Note, and all or any part of such payment is
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by Holder or
paid over to a trustee, receiver or any other entity, whether
under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a "Preferential Payment"), then the
indebtedness of Maker under this Note shall continue or shall be
reinstated, as the case may be, and, to the extent of such
payment or repayment by Holder, the indebtedness evidenced by
this Note or part thereof intended to be satisfied by such
Preferential Payment shall be revived and continued in full force
and effect as if said Preferential Payment had not been made.
Without limiting the right of Holder to bring any action or
proceeding against Maker or any Surety or against any property of
Maker or any Surety (an "Action") arising out of or relating to
this Note or any indebtedness evidenced hereby in the courts of
other jurisdictions, Maker and each Surety hereby irrevocably
submit to the jurisdiction, process and venue of any Arizona
State or Federal court sitting in Tucson, Arizona, and hereby
irrevocably agree that any Action may be heard and determined in
such Arizona State court or in such Federal court. Maker and all
Sureties each hereby irrevocably waives, to the fullest extent it
may effectively do so, the defenses of lack of jurisdiction over
any person, inconvenient forum or improper venue, to the
maintenance of any Action in any jurisdiction.
This Note shall be binding upon Maker and its successors and
assigns and shall inure to the benefit of Payee, and any
subsequent holders of this Note, and their successors and
assigns.
All notices required or permitted in connection with this
Note shall be given at the place and in the manner provided in
the Deed of Trust for the giving of notices.
This Note shall be governed by and construed according to
the laws of the State of Arizona.
IN WITNESS WHEREOF, these presents are executed as of the
date first written above.
NORD COPPER CORPORATION, a Delaware
corporation
By /s/ Ray W. Jenner
Its VP-Finance
MAKER
EXHIBIT 10.128 UNCONDITIONAL GUARANTEE OF PAYMENT
TO: ARIMETCO, INC.
1. FOR VALUABLE CONSIDERATION, the undersigned
(hereinafter called "Guarantor"), whose address is set forth
after Guarantor's signature below, jointly and severally, and
unconditionally, guarantees and promises to pay to ARIMETCO,
INC., a Nevada corporation (hereinafter called "Lender"), or
order, upon demand, in lawful money of the United States, (i)
that note dated of even date herewith, made by NORD COPPER
CORPORATION, a Delaware corporation (hereinafter called
"Borrower"), in favor of Lender in the face amount of ONE MILLION
FIVE HUNDRED FIFTY THOUSAND AND NO 100/HUNDREDS DOLLARS
($1,550,000.00) (the "Note"), principal and interest and all
other sums payable thereunder, or at the election of Lender any
one or more installments thereof, in the event that Borrower
fails to punctually pay any one or more installments of the Note
(principal and/or interest), or any other sum payable thereunder
at the time and in the manner provided therein; and (ii) all
other indebtedness of Borrower to Lender arising under or in
connection with the Note, any loan agreement between Borrower and
Lender executed and delivered in connection with the Note and any
deed of trust or other security document or instrument given in
connection therewith, including without limitation, the
Environmental Indemnification Agreement of even date herewith by
and between Lender and Borrower and the Grant of Production
Payment of even date herewith by and between Lender and Borrower
(the indebtedness evidenced by the Note together with all other
indebtedness specified above is hereinafter collectively called
the "Indebtedness").
2. The obligations of Guarantor hereunder are joint and
several if Guarantor is more than one person or entity, are
separate and independent of the obligations of Borrower and of
any other guarantor, and a separate action or actions may be
brought and prosecuted against Guarantor whether action is
brought against Borrower or any other guarantor or whether
Borrower or any other guarantor is joined in any action or
actions. The obligations of Guarantor hereunder shall survive
and continue in full force and effect until payment in full of
the Indebtedness is actually received by Lender and the period of
time has expired during which any payment made by Borrower or
Guarantor to Lender may be determined to be a Preferential
Payment (defined below), notwithstanding any release or
termination of Borrower's or any other guarantor's liability by
express or implied agreement with Lender or by operation of law
and notwithstanding that the Indebtedness or any part thereof is
deemed to have been paid or discharged by operation of law or by
some act or agreement of Lender. For purposes of this Guarantee,
the Indebtedness shall be deemed to be paid only to the extent
that Lender actually receives immediately available funds and to
the extent of any credit bid by Lender at any foreclosure or
trustee's sale of any security for the Indebtedness.
3. Guarantor agrees that to the extent Borrower or
Guarantor makes any payment to Lender in connection with the
Indebtedness, and all or any part of such payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid by Lender or paid over to a trustee,
receiver or any other entity, whether under any bankruptcy act or
otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guarantee shall continue to be
effective or shall be reinstated, as the case may be, and, to the
extent of such payment or repayment by Lender, the Indebtedness
or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect
as if said Preferential Payment had not been made.
4. Guarantor is providing this Guarantee at the instance
and request of Borrower to induce Lender to extend or continue
financial accommodations to Borrower. Guarantor hereby
represents and warrants that Guarantor is and will continue to be
fully informed about all aspects of the financial condition and
business affairs of Borrower that Guarantor deems relevant to the
obligations of Guarantor hereunder and hereby waives and fully
discharges Lender from any and all obligations to communicate to
Guarantor any information whatsoever regarding Borrower or
Borrower's financial condition or business affairs.
5. Guarantor authorizes Lender, without notice or demand
and without affecting Guarantor's liability hereunder, from time
to time, to: (a) renew, modify, compromise, extend, accelerate
or otherwise change the time for payment of, or otherwise change
the terms of the Indebtedness or any part thereof, including
increasing or decreasing the rate of interest thereon; (b)
release, substitute or add any one or more endorsers, Guarantor
or other guarantors; (c) take and hold security for the payment
of this Guarantee or the Indebtedness, and enforce, exchange,
substitute, subordinate, waive or release any such security; (d)
proceed against such security and direct the order or manner of
sale of such security as Lender in its discretion may determine;
and (e) apply any and all payments from Borrower, Guarantor or
any other guarantor, or recoveries from such security, in such
order or manner as Lender in its discretion may determine.
6. Guarantor waives and agrees not to assert: (a) any
right to require Lender to proceed against Borrower or any other
guarantor, to proceed against or exhaust any security for the
Indebtedness, to pursue any other remedy available to Lender, or
to pursue any remedy in any particular order or manner; (b) the
benefit of any statute of limitations affecting Guarantor's
liability hereunder or the enforcement hereof; (c) demand,
diligence, presentment for payment, protest and demand, and
notice of extension, dishonor, protest, demand, nonpayment and
acceptance of this Guarantee; (d) notice of the existence,
creation or incurring of new or additional indebtedness of
Borrower to Lender; (e) the benefits of any statutory provision
limiting the liability of a surety, including without limitation
the provisions of A.R.S. Sections 12-1641, et seq.; (f) any
defense arising by reason of any disability or other defense of
Borrower or by reason of the cessation from any cause whatsoever
(other than payment in full) of the liability of Borrower for the
Indebtedness; and (g) the benefits of any statutory provision
limiting the right of Lender to recover a deficiency judgment, or
to otherwise proceed against any person or entity obligated for
payment of the Indebtedness, after any foreclosure or trustee's
sale of any security for the Indebtedness, including without
limitation the benefits, if any, to Guarantor of A.R.S. Section
33-814. Guarantor hereby expressly consents to any impairment of
collateral, including, but not limited to, failure to perfect a
security interest and release collateral and any such impairment
or release shall not affect Guarantor's obligations hereunder.
Until payment in full of the Indebtedness, Guarantor shall have
no right of subrogation and hereby waives any right to enforce
any remedy which Lender now has, or may hereafter have, against
Borrower, and waives any benefit of, and any right to participate
in, any security now or hereafter held by Lender.
7. All existing and future indebtedness of Borrower to
Guarantor is hereby subordinated to the Indebtedness and such
indebtedness of Borrower to Guarantor, if Lender so requests,
shall be collected, enforced and received by Guarantor as trustee
for Lender and shall be paid over to Lender on account of the
Indebtedness, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this
Guarantee.
8. In addition to all liens upon, and rights of setoff
against, the monies, securities or other property of Guarantor
given to Lender by law, Lender shall have a lien and a right of
setoff against, and Guarantor hereby grants to Lender a security
interest in, all monies, securities and other property of
Guarantor now and hereafter in the possession of or on deposit
with Lender, whether held in a general or special account or
deposit, or for safekeeping or otherwise; every such lien and
right of setoff may be exercised without demand upon or notice to
Guarantor. No lien or right of setoff shall be deemed to have
been waived by any act or conduct on the part of Lender, by any
neglect to exercise such right of setoff or to enforce such lien,
or by any delay in so doing.
9. If Borrower is a corporation or partnership, it is not
necessary for Lender to inquire into the powers of Borrower or
the officers, directors, partners or agents acting or purporting
to act on its behalf, and any of the Indebtedness made or created
in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
10. Guarantor agrees to pay all reasonable attorneys' fees
and all other reasonable costs and expenses which may be incurred
by Lender in enforcing this Guarantee or in collecting all or any
part of the Indebtedness.
11. This Guarantee sets forth the entire agreement of
Guarantor and Lender with respect to the subject matter hereof
and supersedes all prior oral and written agreements and
representations by Lender to Guarantor. No modification or
waiver of any provision of this Guarantee or any right of Lender
hereunder and no release of Guarantor from any obligation
hereunder shall be effective unless in a writing executed by an
authorized officer of Lender. There are no conditions, oral or
otherwise, on the effectiveness of this Guarantee.
12. This Guarantee shall inure to the benefit of Lender and
its successors and assigns and shall be binding upon Guarantor
and its heirs, personal representatives, successors and assigns.
Lender may assign this Guarantee in whole or in part without
notice.
13. This Guarantee shall be governed by and construed
according to the laws of the State of Arizona.
IN WITNESS WHEREOF these presents are executed as of the 8th
day of June, 1999.
GUARANTOR:
NORD RESOUNCES CORPORATION, a Delaware corporation
By: /s/ Ray W. Jenner
Its VP-Finance
Address: 201 Third Street, NW
Albuquerque, NM 87102
STATE OF ARIZONA )
) ss.
COUNTY OF PIMA )
The foregoing instrument was acknowledged before me this
_____ day of June, 1999, by _______________________________, the
____________________________ of NORD RESOURCES CORPORATION, and a
Delaware corporation, on behalf of that corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
/s/ Sue Utter
Notary Public
My commission expires:
February 22, 2003
EXHIBIT 10.129
When recorded, return to:
Steven R. Haydon
Streich Lang, P.A.
One South Church Avenue
Suite 1700
Tucson, Arizona 85701
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
This Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing (hereinafter called "Deed of Trust") is made
as of the 8th day of June, 1999, by and among NORD COPPER
CORPORATION, a Delaware corporation, whose mailing address is 201
3rd Street, NW, Suite 1750, Albuquerque, New Mexico 87102, and
whose chief executive office (or residence if such party is an
individual without an office) is located at 201 3rd Street, NW,
Suite 1750, Albuquerque, New Mexico 87102 , hereinafter called
"Trustor," Steven R. Haydon, whose mailing address is One South
Church Avenue, Suite 1700, Tucson, Arizona 85701, hereinafter
called "Trustee," and ARIMETCO, INC., a Nevada corporation, whose
mailing address is 7739 East Broadway, Suite 352, Tucson, Arizona
85710-3947, hereinafter called "Beneficiary."
WITNESSETH:
SECTION 1. GRANTING CLAUSE; WARRANTY OF TITLE
1.1 Except as provided in Paragraph 4.2 hereof, Trustor
hereby irrevocably grants, transfers, and assigns to Trustee, in
trust, with power of sale, all of Trustee's present and future
estate, right, title and interest in and to that real property
and all buildings and other improvements now thereon or hereafter
constructed thereon (the "Premises"), in the County of Cochise,
State of Arizona, described on Schedule "A" attached hereto and
by this reference made a part hereof, subject to those matters
specifically described on Schedule "B" attached hereto and by
this reference made a part hereof (the "Permitted Exceptions"),
together with all of the following which, with the Premises
(except where the context otherwise requires), are hereinafter
collectively called the "Trust Property":
(a) All appurtenances in and to the Premises;
(b) All water and water rights, ditches and ditch
rights, reservoir and reservoir rights, stock or interests in
irrigation or ditch companies, minerals, oil and gas rights,
royalties, lease or leasehold interests owned by Trustor, now or
hereafter used or useful in connection with, appurtenant to or
related to the Premises;
(c) All right, title and interest of Trustor now owned
or hereafter acquired in and to all streets, roads, alleys and
public places, and all easements and rights of way, public or
private, now or hereafter used in connection with the Premises;
(d) All machinery, equipment, fixtures and materials
now or at any time attached to the Premises together with all
processing, manufacturing and service equipment and other
personal property now or at any time hereafter located on or
appurtenant to the Premises and used in connection with the
management and operation thereof;
(e) Any licenses, contracts, permits and agreements
required or used in connection with the ownership, operation or
maintenance of the Premises, and the right to the use of any
tradename, trademark, or service mark now or hereafter associated
with the operation of any business conducted on the Premises;
(f) Any and all insurance proceeds, and any and all
awards, including interest, previously and hereafter made to
Trustor for taking by eminent domain of the whole or any part of
the Premises or any easements therein;
(g) Subject to the rights of Beneficiary under Section
3 hereof, all existing and future leases, subleases, licenses and
other agreements for the use and occupancy of all or any portion
of the Premises and all income, receipts, revenues, rents, issues
and profits arising from the use or enjoyment of all or any
portion of the Premises.
TRUSTOR FURTHER REPRESENTS, WARRANTS, COVENANTS AND AGREES
AS FOLLOWS:
SECTION 2. OBLIGATION SECURED
This Deed of Trust is given for the purpose of securing, in
such order of priority as Beneficiary may elect:
2.1 Payment of the sum of ONE MILLION FIVE HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($1,550,000.00) with interest
thereon, extension and other fees, late charges, prepayment
premiums and attorneys' fees, according to the terms of that
Promissory Note dated of even date herewith, made by Trustor,
payable to the order of Beneficiary, and all extensions,
modifications, renewals or replacements thereof (hereinafter
called the "Note"). Subject to any determination by the
Bankruptcy Court in Beneficiary's pending bankruptcy case as to
the amount owed to Cochise County, Beneficiary agrees that
Trustor shall and directs Trustor to pay the principal and
interest amounts due under the Note directly to the Cochise
County, Arizona Treasurer (the "Treasurer") in satisfaction of
the tax liens outstanding on the date hereof against the Johnson
Camp Property ("Tax Liens") so long as such Tax Liens remain
outstanding. Upon payment in full of the Tax Liens and release
thereof, Trustor agrees to pay the remainder of the amounts due
under the Note to the Treasurer in satisfaction of the Tax Liens
satisfies all payment obligations of the Trustor to the
Beneficiary under the Note for the purchase of the Johnson Camp
Property; and
2.2 Payment, performance and observance by Trustor of each
covenant, condition, provision and agreement contained herein and
of all monies expended or advanced by Beneficiary pursuant to the
terms hereof, or to preserve any right of Beneficiary hereunder,
or to protect or preserve the Trust Property or any part thereof;
All of the indebtedness and obligations secured by this Deed of
Trust are hereinafter collectively called the "Obligation."
SECTION 3. LEASES; ASSIGNMENT OF RENTS AND LEASES
3.1 To facilitate payment and performance of the
Obligation, Trustor hereby absolutely transfers and assigns to
Beneficiary all right, title and interest of Trustor in and to
(i) all existing and future leases, subleases, licenses and other
agreements for the use and occupancy of all or any part of the
Trust Property, whether written or oral and whether for a
definite term or month to month, including but not limited to
those described on Schedule "C" attached hereto and by this
reference made a part hereof, together with all guarantees of the
lessee's obligations thereunder and together with all extensions,
modifications and renewals thereof (hereinafter called the
"Leases"), and (ii) all income, receipts, revenues, rents, issues
and profits now or hereafter arising from or out of the Leases or
from or out of the Trust Property or any part thereof, including
without limitation room rents, minimum rents, additional rents,
percentage rents, parking and maintenance charges and fees, tax
and insurance contributions, proceeds of the sale of utilities
and services, cancellation premiums, claims for damages arising
from any breach of the Leases, proceeds from any sale or other
disposition of all or any portion of the Trust Property, and all
other benefits arising from the use or enjoyment of, or the
lease, sale or other disposition of, all or any portion of the
Trust Property, together with the immediate and continuing right
to receive all of the foregoing (hereinafter called the "Rents").
In furtherance of this Assignment, and not in lieu hereof,
Beneficiary may require a separate assignment of rents and leases
and/or separate specific assignments of rents and leases covering
one or more of the Leases; the terms of all such assignments are
incorporated herein by reference.
3.2 Trustor hereby authorizes and directs the lessees and
tenants under the Leases that, upon written notice from
Beneficiary, all Rents shall be paid directly to Beneficiary as
they become due. Trustor hereby relieves the lessees and tenants
from any liability to Trustor by reason of the payment of the
Rents to Beneficiary. Nevertheless, Trustor shall be entitled to
collect the Rents until Beneficiary notifies the lessees and
tenants in writing to pay the Rents to Beneficiary. Beneficiary
is hereby authorized to give such notification upon the
occurrence of an Event of Default and at any time thereafter
while such Event of Default is continuing. Receipt and
application of the Rents by Beneficiary shall not constitute a
waiver of any right of Beneficiary under this Deed of Trust or
applicable law, shall not cure any Event of Default hereunder,
and shall not invalidate or affect any act done in connection
with such Event of Default, including, without limitation, any
trustee's sale or foreclosure proceeding.
3.3 All Rents collected by Trustor shall be applied in the
following manner:
First, to the payment of all taxes and lien assessments
levied against the Trust Property, where provision for paying
such is not otherwise made;
Second, to the payment of ground rents (if any) payable
with respect to the Trust Property;
Third, to the payment of any amounts due and owing
under the Obligation;
Fourth, to the payment of current operating costs and
expenses (including repairs, maintenance and necessary
acquisitions of property and expenditures for capital
improvements) arising in connection with the Trust Property;
Fifth, to Trustor or its designee.
All Rents collected by Beneficiary may be applied to the items
above listed in any manner that Beneficiary deems advisable and
without regard to the aforestated priorities.
3.4 Trustor represents and warrants that: (i) the Leases
are in full force and effect and have not been modified or
amended; (ii) the Rents have not been waived, discounted,
compromised, setoff or paid more than one month in advance; (iii)
there are no other assignments, transfers, pledges or
encumbrances of any Leases or Rents; and (iv) neither Trustor nor
the lessees and tenants are in default under the Leases.
3.5 Trustor shall (i) fulfill or perform each and every
material term, covenant and provision of the Leases to be
fulfilled or performed by the lessor thereunder; (ii) give prompt
notice to Beneficiary of any notice received by Trustor of
default thereunder or of any alleged default or failure of
performance that could become a default thereunder, together with
a complete copy of any such notice; and (iii) enforce, short of
termination thereof, the performance or observance of each and
every material term, covenant and provision of each Lease to be
performed or observed by the lessees and tenants thereunder.
3.6 Trustor, without the prior written consent of
Beneficiary (not to be unreasonably withheld) shall not: (i)
cancel, modify or alter, or accept the surrender of, any Lease;
(ii) assign, transfer, pledge or encumber, the whole or any part
of the Leases and Rents to anyone other than Beneficiary; (iii)
accept any Rents more than one month in advance of the accrual
thereof; (iv) do or permit anything to be done, the doing of
which, or omit or refrain from doing anything, the omission of
which, could be a breach or default under the terms of any Lease
or a basis for termination thereof.
3.7 Beneficiary does not assume and shall not be liable for
any obligation of the lessor under any of the Leases and all such
obligations shall continue to rest upon Trustor as though this
assignment had not been made. Beneficiary shall not be liable
for the failure or inability to collect any Rents.
3.8 Neither the Assignment of Rents and Leases contained
herein or in any separate assignment nor the exercise by
Beneficiary of any of its rights or remedies thereunder or in
connection therewith, prior to Beneficiary obtaining actual
possession of the Trust Property as provided in Paragraph 8.2
hereof, shall constitute Beneficiary a "mortgagee in possession"
or otherwise make Beneficiary responsible or liable in any manner
with respect to the Trust Property or the occupancy, operation or
use thereof. In the event Beneficiary obtains actual possession
of the Trust Property as provided in Paragraph 8.2 hereof,
Beneficiary shall have the rights, and Beneficiary's liability
shall be limited, as provided in that Paragraph.
SECTION 4. SECURITY AGREEMENT
4.1 Except as provided in Paragraph 4.2 hereof, this Deed
of Trust shall cover, and the Trust Property shall include, all
property now or hereafter affixed or attached to or incorporated
upon the Premises, which, to the fullest extent permitted by law,
shall be deemed fixtures and a part of the Premises. To the
extent any of the Trust Property consists of rights in action or
personal property covered by the Uniform Commercial Code, this
Deed of Trust shall also constitute a security agreement, and
Trustor hereby grants to Beneficiary, as secured party, a
security interest in such property, including all proceeds
thereof, for the purpose of securing the Obligation. In
addition, except as provided in Paragraph 4.2 hereof, for the
purpose of securing the Obligation, Trustor hereby grants to
Beneficiary, as secured party, a security interest in all of the
property located on, or used in connection with or associated
with the Premises described below in, to, or under which Trustor
now has or hereafter acquires any right, title or interest,
whether present, future, or contingent: all equipment, inventory,
accounts, general intangibles, instruments, documents, and
chattel paper, as those terms are defined in the Uniform
Commercial Code, and all other personal property of any kind
(including without limitation money and rights to the payment of
money), whether now existing or hereafter created, that are now
or at any time hereafter (i) in the possession or control of
Beneficiary in any capacity; (ii) erected upon, attached to, or
appurtenant to, the Premises; (iii) located or used on the
Premises or identified for use on the Premises (whether stored on
the Premises or elsewhere); or (iv) used in connection with,
arising from, related to, or associated with the Premises or any
of the personal property described herein, the construction of
any improvements on the Premises, the ownership, development,
maintenance, leasing, management, or operation of the Premises,
the use or enjoyment of the Premises, or the operation of any
business conducted on the Premises; including without limitation
all such property more particularly described as follows:
(a) Buildings, structures and improvements, and
building materials, fixtures and equipment to be incorporated
into any buildings, structures or improvements;
(b) Goods, materials, supplies, fixtures, equipment,
machinery, furniture and furnishings, including without
limitation, all such items used for (i) generation, storage or
transmission of air, water, heat, steam, electricity, light,
fuel, refrigeration or sound; (ii) ventilation, air-conditioning,
heating, refrigeration, fire prevention and protection,
sanitation, drainage, cleaning, transportation, communications,
maintenance or recreation; (iii) removal of dust, refuse, garbage
or snow; (iv) transmission, storage, processing or retrieval of
information; and (v) floor, wall, ceiling and window coverings
and decorations;
(c) Income, receipts, revenues, rents, issues and
profits, including without limitation, room rents, minimum rents,
additional rents, percentage rents, parking and maintenance
charges and fees, tax and insurance contributions, proceeds of
the sale of utilities and services, cancellation premiums, and
claims for damages arising from the breach of any leases;
(d) Water and water rights, ditches and ditch rights,
reservoirs and reservoir rights, stock or interest in irrigation
or ditch companies, minerals, oil and gas rights, royalties, and
lease or leasehold interests;
(e) Plans and specifications prepared for the
construction of any improvements, including without limitation,
all studies, estimates, data, and drawings;
(f) Documents, instruments and agreements relating to,
or in any way connected with, the operation, control or
development of the Premises, including without limitation, any
declaration of covenants, conditions and restrictions and any
articles of incorporation, bylaws and other membership documents
of any property owners association or similar group;
(g) Claims and causes of action, legal and equitable,
in any form whether arising in contract or in tort, and awards,
payments and proceeds due or to become due, including without
limitation those arising on account of any loss of, damage to,
taking of, or diminution in value of, all or any part of the
Premises or any personal property described herein;
(h) Sales agreements, escrow agreements, deposit
receipts, and other documents and agreements for the sale or
other disposition of all or any part of the Premises or any of
the personal property described herein, and deposits, proceeds
and benefits arising from the sale or other disposition of all or
any part of the Premises or any of the personal property
described herein;
(i) Policies or certificates of insurance, contracts,
agreements or rights of indemnification, guaranty or surety, and
awards, loss payments, proceeds, and premium refunds that may be
payable with respect to such policies, certificates, contracts,
agreements or rights;
(j) Contracts, agreements, permits, licenses,
authorizations and certificates, including without limitation all
architectural contracts, construction contracts, management
contracts, service contracts, maintenance contracts, franchise
agreements, license agreements, building permits and operating
licenses;
(k) Trade names, trademarks, and service marks
(subject to any franchise or license agreements relating
thereto);
(l) Refunds and deposits due or to become due from any
utility companies or governmental agencies;
(m) Replacements and substitutions for, modifications
of, and supplements, accessions, addenda and additions to, all of
the personal property described herein;
(n) Books, records, correspondence, files and
electronic media, and all information stored therein;
together with all products and proceeds of all of the foregoing,
in any form, including all proceeds received, due or to become
due from any sale, exchange or other disposition thereof, whether
such proceeds are cash or non-cash in nature, and whether
represented by checks, drafts, notes or other instruments for the
payment of money. The personal property described or referred to
in this Paragraph 4.1 is hereinafter called the "Personal
Property." The security interests granted in this Paragraph 4.1
are hereinafter severally and collectively called the "Security
Interest." The Personal Property includes and the Security
Interest extends to the particular items shown on Schedule "D"
attached hereto. The parties hereto agree that this Deed of
Trust shall be deemed and is a Security Agreement as defined in
and for all purposes under the Uniform Commercial Code as in
effect in the State of Arizona.
4.2 Notwithstanding anything herein to the contrary, the
Trust Property shall not include and the Security Interest
granted to Beneficiary under Paragraph 4.1 shall not extend to
and shall not be in any buildings, structures, improvements,
fixtures, machinery, equipment, furniture and furnishings, or any
contracts, leases documents, instruments or agreements thereof;
hereafter acquired by Trustor unless such property was acquired
in whole or in part with the proceeds of the Trust Property or
are replacements in whole or in part for the Trust Property.
4.3 The Security Interest shall be self-operative with
respect to the Personal Property, but Trustor shall execute and
deliver upon receipt of written request therefor from Beneficiary
such additional security agreements, financing statements and
other instruments as may be reasonably requested in order to
impose the Security Interest more specifically upon the Personal
Property. The Security Interest, at all times, shall be prior to
any other interests in the Personal Property except any lien or
security interest granted in connection with any Permitted
Exception. Trustor shall act and perform as necessary and shall
execute and file all security agreements, financing statements,
continuation statements and other documents reasonably requested
by Beneficiary to establish, maintain and continue the perfected
Security Interest. Trustor, on demand, shall promptly pay all
costs and expenses of filing and recording.
4.4 Trustor shall not sell, transfer, assign or otherwise
dispose of any Personal Property or any interest therein without
obtaining the prior written consent of Beneficiary not to be
unreasonably withheld, except Personal Property that Trustor is
obliged to replace pursuant to the terms hereof. Unless
Beneficiary then agrees otherwise in writing, all proceeds from
any permitted sale or disposition in excess of that required for
replacements shall be paid to Beneficiary to be applied to the
Obligation, whether or not then due. Trustor shall keep the
Personal Property free of all security interests or other
encumbrances, except the Security Interest and any security
interests and encumbrances granted in connection with any
Permitted Exception. Although proceeds of Personal Property are
covered hereby, this shall not be construed to mean that
Beneficiary consents to any sale of the Personal Property.
4.5 Trustor shall keep and maintain the Personal Property
in at least as good condition and repair as in existence as of
the date hereof, normal wear and tear excepted, and shall
promptly replace any part thereof that from time to time may
become obsolete, badly worn or in a state of disrepair. All such
replacements shall be free of any other security interest or
encumbrance, except any security interest or encumbrance granted
in connection with any Permitted Exception.
4.6 Except for purposes of replacement and repair, Trustor,
without the prior written consent of Beneficiary not to be
unreasonably withheld, shall not remove, or permit the removal
of, any Personal Property from the Premises.
4.7 Trustor hereby warrants, covenants and agrees that: (i)
the Personal Property is or will be used primarily for business
(other than farm) purposes; (ii) the Personal Property will be
kept at the Premises; and (iii) Trustor's records concerning the
Personal Property will be kept at Trustor's address as set forth
in the beginning of this Deed of Trust or at the Premises.
4.8 Trustor represents and warrants that (i) the name
specified above for Trustor is the true and correct legal name of
Trustor, and (ii) the address specified above is the address of
Trustor's chief executive office. Trustor shall give Beneficiary
immediate written notice of any change in the location of: (i)
Trustor's chief executive office, as set forth in the beginning
of this Deed of Trust; (ii) the Personal Property or any part
thereof; or (iii) Trustor's records concerning the Personal
Property. Trustor shall give Beneficiary immediate written
notice of any change in the name, identity or structure of
Trustor.
4.9 All covenants and warranties of Trustor contained in
this Deed of Trust shall apply to the Personal Property whether
or not expressly referred to in this Section 4. The covenants
and warranties of Trustor contained in this Section 4 are in
addition to, and not in limitation of, those contained in the
other provisions of this Deed of Trust.
4.10 Upon its recording in the real property records, this
Deed of Trust shall be effective as a financing statement filed
as a fixture filing. In addition, a carbon, photographic or
other reproduced copy of this Deed of Trust and/or any financing
statement relating hereto shall be sufficient for filing and/or
recording as a financing statement. The filing of any other
financing statement relating to any personal property, rights or
interests described herein shall not be construed to diminish any
right or priority hereunder.
SECTION 5. PROTECTION AND PRESERVATION OF THE TRUST PROPERTY
5.1 Trustor shall neither commit nor permit to occur any
waste upon the Trust Property but shall at all times make or
cause to be made all commercially reasonable repairs,
maintenance, renewals and replacements as may be necessary to
maintain the Trust Property in at least as good condition and
repair as in existence as of the date hereof, normal wear and
tear excepted.. Trustor shall neither use nor permit the use of
the Trust Property in material violation of any applicable
statute, ordinance or regulation, including, without limitation,
the Americans With Disabilities Act of 1990 and corresponding
rules and regulations (the "ADA"), or any policy of insurance
insuring the Trust Property. Trustor shall not Release on, under
or about the Premises any Hazardous Substance nor permit any
third party to do so except in substantial accordance with
Environmental Law. As used herein, the following terms shall
have the meanings specified below:
The term "Environmental Law" shall mean any federal, state
or local statute, ordinance, or regulation pertaining to health,
industrial hygiene, or the environment, including, without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. ("CERCLA"); the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901, et seq. ("RCRA");
and the Arizona Environmental Quality Act, Title 49, Arizona
Revised Statutes, and all rules adopted and guidelines
promulgated pursuant to the foregoing.
The term "Hazardous Substance" shall include:
(a) those substances included within the definitions
of "hazardous substances," "hazardous materials," "toxic
substances," or "solid waste" in CERCLA, RCRA, and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
and in the regulations promulgated pursuant thereto;
(b) those substances defined as "hazardous substances"
in A.R.S. Section 49-201 and in rules adopted or guidelines
promulgated pursuant thereto;
(c) those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency as hazardous
substances (40 CFR Part 302 and amendments thereto); and
(d) all other substances, materials and wastes that
are, or that become, regulated under, or that are classified as
hazardous or toxic under, any Environmental Law.
The term "Release" shall mean any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing, or dumping.
5.2 Trustor shall promptly complete any improvements that
may be commenced, in good and workmanlike manner and in
conformity with the ADA. Trustor shall repair and restore, in
conformity with the ADA, any portions of the Trust Property that
may be damaged or destroyed. Trustor shall pay when due all
claims for work performed and materials furnished on or in
connection with the Trust Property or any part thereof and shall
pay, discharge, or cause to be removed, all mechanic's,
artisan's, laborer's or materialman's charges, liens, claims of
liens or encumbrances upon the Trust Property. Trustor shall
substantially comply with all material laws, ordinances and
regulations now or hereafter enacted, including, without
limitation, the ADA, affecting the Trust Property or requiring
any alterations or improvements to be made. Except as required
by law, Trustor shall not remove, substantially alter, or
demolish any building or improvement included in the Trust
Property without Beneficiary's prior written consent not to be
unreasonably withheld.
5.3 (a) Trustor shall provide and maintain policies of
fire and extended coverage insurance on the Trust Property in an
amount not less than the full insurable value, on a replacement-
cost basis, of the Trust Property and, when requested by
Beneficiary, shall also provide and maintain policies of
insurance in amounts commercially reasonable covering vandalism
and malicious mischief, sprinkler leakage, rent abatement and/or
business loss, flood damage, earthquake and all other risks
commonly insured against by persons owning like properties in the
locality of the Trust Property or commonly required by prudent
institutional lenders making loans secured by liens against such
properties. All such policies shall contain standard, non-
contributory trust beneficiary clauses making losses payable to
Beneficiary. Trustor shall also provide and maintain
comprehensive public liability insurance in amounts reasonably
required by Beneficiary and containing endorsements naming
Beneficiary as an additional insured. All insurance policies
shall be with companies from time to time reasonably approved by
Beneficiary, shall provide that Beneficiary is to receive thirty
(30) days' notice prior to cancellation and shall otherwise be in
form and substance reasonably satisfactory to Beneficiary.
Original policies of insurance shall be delivered to Beneficiary;
renewal policies shall be delivered to Beneficiary thirty (30)
days before the expiration of the then-existing policies with
satisfactory proof that the premiums for renewal have been paid.
(b) In the event of loss, Trustor shall give immediate
notice to Beneficiary, and Beneficiary may make proof of loss if
not made promptly by Trustor. Each insurance company is hereby
authorized and directed to make payment for loss directly to an
escrow account with a third party bank selected by Beneficiary in
its reasonable discretion upon the written discretion of
Beneficiary, instead of to Trustor or to Trustor and Beneficiary
jointly; Beneficiary may apply all or any part of such insurance
proceeds to the payment of the Obligation, whether or not then
due, or the restoration or repair of the Trust Property.
Beneficiary shall not be responsible for any insurance, for the
collection of any insurance proceeds, or for the insolvency of
any insurer. Application of insurance proceeds in an amount less
than the full outstanding amount of the Obligations by
Beneficiary shall not cure nor waive any Event of Default nor
invalidate any act done hereunder because of any such Event of
Default. In the event of the sale of the Trust Property under
the power of sale herein granted to Trustee, or upon foreclosure
of this Deed of Trust as a mortgage, or in the event Beneficiary
or a receiver appointed by the court shall take possession of the
Trust Property without sale, then all right, title and interest
of Trustor in and to all insurance policies then in force shall
inure to the benefit of and pass to the beneficiary in
possession, receiver or purchaser at such sale, as the case may
be. Beneficiary is hereby appointed attorney in fact for Trustor
to assign and transfer such policies.
(c) If the insurance proceeds are to be used for the
restoration and repair of the Trust Property, they shall be held
in a non-interest bearing escrow account with a third party bank
selected by Beneficiary in its reasonable discretion (the
"Restoration Account"). Trustor, at its expense, shall promptly
prepare and submit to Beneficiary all plans and specifications
necessary for the restoration and repair of the damaged Trust
Property, together with evidence reasonably acceptable to
Beneficiary setting forth the total expenditure needed for the
restoration and repair based upon a fixed price contract with a
reputable builder and covered by performance and labor and
material payment bonds. The plans and specifications and all
other aspects of the proposed restoration and repair shall be
subject to Beneficiary's approval not to be unreasonable
withheld. In the event the insurance proceeds held in the
Restoration Account are insufficient to complete the restoration
and repair, Trustor shall deposit in the Restoration Account an
amount equal to the difference between the amount then held in
the Restoration Account and the total contract price for the
restoration and repair. Trustor may commence restoration and
repair of the damaged Trust Property only when authorized in
writing by Beneficiary to do so and thereafter shall proceed in a
commercially reasonable manner with the restoration and repair
until completed. Disbursements shall be made from the
Restoration Account for the restoration and repair in accordance
with a disbursement schedule, and subject to other terms and
conditions, reasonably acceptable to Beneficiary. Disbursements
from the Restoration Account shall be charged first against funds
deposited by Trustor and, after such funds are exhausted, against
the insurance proceeds deposited therein. In the event the
amounts held in the Restoration Account exceed the cost of the
restoration and repair of the damaged Trust Property, the excess
funds shall be disbursed to Trustor to the extent of any amounts
deposited therein by Trustor. Any funds remaining after such
disbursement, at Beneficiary's option, may be applied by
Beneficiary to the payment of the Obligation, whether or not then
due, or may be disbursed to Trustor. All funds held in the
Restoration Account are hereby assigned to Beneficiary as further
security for the Obligation. Beneficiary, at any time, may apply
all or any part of the funds held in the Restoration Account to
the curing of any Event of Default.
5.4 Trustor shall maintain and preserve all patented and
unpatented mining claims that are a part of the Trust Property.
Trustor shall pay or cause to be paid all taxes and assessments
of every kind, nature and description levied or assessed on or
against the Trust Property and shall deliver to Beneficiary, at
least ten (10) days before they become delinquent, receipts
showing payment of all such taxes and assessments. Trustor shall
maintain and preserve all permits associated with the Trust
Property and shall pay or cause to be paid all fees and charges
of every kind, nature and description with respect to the permits
and shall deliver to Beneficiary at least ten (10) days before
they become delinquent, receipts showing payment of all such fees
and charges. Trustor also shall pay when due all dues and
charges for water and water delivery, electricity, gas, sewers,
waste removal, bills for repairs, and any and all other claims,
encumbrances and expenses incident to the ownership of the Trust
Property and when requested by Beneficiary, Trustor shall
promptly deliver to Beneficiary evidence of payment of such
expenses. Trustor may contest in good faith the validity or
amount of any tax, assessment, charge or encumbrance in the
manner provided by law, provided that Trustor shall have
furnished Beneficiary a cash deposit to be held in an escrow
account with a third party bank selected by Beneficiary in its
reasonable discretion to protect Beneficiary against the creation
of any lien on, or any sale or forfeiture of, the Trust Property.
Upon the final determination of Trustor's contest, Trustor shall
promptly pay all sums determined to be due. Any deposit or
security provided by Trustor shall be returned to Trustor upon
the final determination of Trustor's contest and the payment by
Trustor of the sums, if any, determined to be due.
5.5 Beneficiary may contest, by appropriate legal
proceedings, the validity of any valuation for real or personal
property tax purposes or of any levy or assessment of any real or
personal property taxes against the Trust Property either in the
name of Beneficiary or the name of Trustor or both. Trustor,
upon notice and request by Beneficiary, shall join in any such
proceedings. Trustor shall cooperate with Beneficiary in any
such proceeding and execute any documents or pleadings required
for such purposes. Trustor shall provide Beneficiary with a copy
of the Notice of Valuation within ten (10) days after receipt
(five (5) days in the case of personal property). If Beneficiary
is successful in contesting any valuation, Trustor shall
reimburse Beneficiary for all reasonable costs and legal expenses
incurred by Beneficiary in connection with any such proceedings,
but in no event shall such reimbursement exceed the tax savings
achieved for the period covered by the Notice of Valuation. To
facilitate the right of Beneficiary to contest any real or
personal property tax valuation, levy, or assessment as described
above, Trustor does hereby make, constitute and appoint
Beneficiary, and its successors and assigns, Trustor's true and
lawful attorney-in-fact, in Trustor's name, place and stead, or
otherwise, to file any claim or proceeding or to take any action,
either in its own name, in that of its nominee, in the name of
Trustor, or otherwise, to contest any real or personal property
tax valuation, levy, or assessment. The power of attorney given
herein is a power coupled with an interest and shall be
irrevocable so long as any part of the Obligation remains unpaid
or unperformed. Beneficiary shall have no obligation to exercise
any of the foregoing rights and powers in any event.
5.6 In order to insure the payment of taxes and assessments
that are now, or hereafter may be, a lien upon the Trust
Property, and to insure the payment of all premiums on policies
of insurance required herein, Trustor, if required by Beneficiary
after an event of default, shall pay to Beneficiary each month to
be held in an escrow account in a third party bank selected by
Beneficiary in its reasonable discretion, in addition to any
other payments required hereunder, an amount equal to the taxes
and special assessments levied or to be levied against the Trust
Property and the premium or premiums that will become due and
payable to maintain the insurance on the Trust Property, all as
reasonably estimated by Beneficiary (giving due consideration to
the previous year's taxes, assessments and premiums) less all
deposits therefore already made, divided by the number of months
remaining before one month prior to the date when the taxes,
assessments and premiums become delinquent. If amounts paid to
Beneficiary under the terms of this paragraph are insufficient to
pay all taxes, assessments and premiums as they become due,
Trustor shall pay to Beneficiary upon demand all additional sums
necessary to fully pay and discharge these items. All moneys
paid to Beneficiary under the terms of this paragraph may be
either held by Beneficiary in an escrow account with a third
party bank selected by Beneficiary in its reasonable discretion
to pay the taxes, assessments and premiums before the same become
delinquent or applied to the Obligation upon payment by
Beneficiary from its own funds of the taxes, assessments and
premiums. To the extent provision is not made for payment
pursuant to this paragraph, Trustor shall remain obligated to pay
all taxes, assessments and premiums as they become due and
payable. Beneficiary shall have no liability to Trustor for
interest on any deposits.
5.7 Trustor hereby assigns, transfers and conveys to
Beneficiary all compensation and each and every award of damages
in connection with any condemnation for public or private use of,
or injury to, the Trust Property or any part thereof, to the
extent of the Obligation then remaining unpaid, and all such
compensation and awards shall be paid directly to Beneficiary.
Beneficiary may apply all or any part of such compensation and
awards to the payment of the Obligation, whether or not then due,
or to the restoration or repair of the Trust Property.
SECTION 6. PROTECTION AND PRESERVATION OF BENEFICIARY'S INTEREST
6.1 Trustor, by the payment of any such tax or taxes, shall
protect Beneficiary against any and all loss from any taxation of
indebtedness or deeds of trust, direct or indirect, that may be
imposed upon this Deed of Trust, the lien of this Deed of Trust
on the Trust Property, or upon the Obligation, by any law, rule,
regulation or levy of the federal government, any state
government, or any political subdivision thereof. In the event
the burden of such taxation cannot lawfully be shifted from
Beneficiary to Trustor, Beneficiary may declare the entire
Obligation due and payable sixty (60) days after notice to
Trustor.
6.2 If Trustor shall fail to pay any taxes, assessments,
expenses or charges, to keep all of the Trust Property free from
liens and claims of liens, to maintain and repair the Trust
Property, or to procure and maintain insurance thereon, or
otherwise fail to perform as required herein, Beneficiary may
advance the monies necessary to pay the same, to accomplish such
maintenance and repairs, to procure and maintain such insurance
or to so perform; Beneficiary is hereby authorized to enter upon
the Trust Property for such purposes.
6.3 Upon written request by Beneficiary, and excluding any
actions by Beneficiary to object to claims in Beneficiary's
pending Chapter 11 bankruptcy case, Trustor shall appear in and
prosecute or defend any action or proceeding that may affect the
lien or the priority of the lien of this Deed of Trust or the
rights of Beneficiary hereunder and shall pay all costs, expenses
(including the cost of searching title) and attorneys' fees
incurred in such action or proceeding. Beneficiary may appear in
and defend any action or proceeding purporting to affect the lien
or the priority of the lien of this Deed of Trust or the rights
of Beneficiary. Beneficiary may pay, purchase, contest or
compromise any adverse claim, encumbrance, charge or lien that in
the judgment of Beneficiary appears to be prior or superior to
the lien of this Deed of Trust, other than any Permitted
Exceptions.
6.4 Without obtaining the prior written consent of
Beneficiary not to be unreasonably withheld, Trustor shall not
sell, transfer, convey, assign or otherwise dispose of, or
further encumber, all or any material part of the Trust Property
or any interest therein, voluntarily or involuntarily, by
operation of law or otherwise. If Trustor is a corporation,
partnership, joint venture or trust, any material change in the
ownership or management of, or interest in, Trustor, or any
pledge or encumbrance of any interest in Trustor, shall be deemed
to be a transfer of the Trust Property. Upon the occurrence of
any such transaction with Beneficiary's consent, or without
Beneficiary's consent if Beneficiary elects not to exercise its
rights and remedies for an Event of Default, Beneficiary (i) may
increase the interest rate on all or any part of the Obligation
as set forth in the Note; (ii) may charge a loan fee and a
processing fee in connection with the change; and (iii) shall not
be obligated to release Trustor from any liability hereunder or
for the Obligation except to the extent required by law. Consent
to any such transaction shall not be deemed to be consent or a
waiver of the requirement of consent to any other such
transaction.
6.5 Without obtaining the prior written consent of
Beneficiary, Trustor shall not consent to, or vote in favor of,
the inclusion of all or any part of the Trust Property in any
Community Facilities District formed pursuant to the Community
Facilities District Act, A.R.S. Section 48-701, et seq., as
amended from time to time. Trustor shall immediately give notice
to Beneficiary of any notification or advice that Trustor may
receive from any municipality or other third party of any intent
or proposal to include all or any part of the Trust Property in a
Community Facilities District. Beneficiary shall have the right
to file a written objection to the inclusion of all or any part
of the Trust Property in a Community Facilities District, either
in its own name or in the name of Trustor, and to appear at, and
participate in, any hearing with respect to the formation of any
such district.
6.6 All rights, powers and remedies granted Beneficiary
herein, or otherwise available to Beneficiary, are for the sole
benefit and protection of Beneficiary, and Beneficiary may
exercise any such right, power or remedy at its option and in its
sole and absolute discretion without any obligation to do so. In
addition, if, under the terms hereof, Beneficiary is given two or
more alternative courses of action, Beneficiary may elect any
alternative or combination of alternatives, at its option and in
its sole and absolute discretion. All monies advanced by
Beneficiary under the terms hereof and all amounts paid, suffered
or incurred by Beneficiary in exercising any authority granted
herein, including reasonable attorneys' fees, shall be added to
the Obligation, shall be secured by this Deed of Trust, shall
bear interest at the highest rate payable on any of the
Obligation until paid, and shall be due and payable by Trustor to
Beneficiary immediately without demand.
6.7 Trustor, upon receipt of Beneficiary's reasonable
written request, shall promptly correct any defect, error or
omission that may be discovered in the content of this Deed of
Trust or in the execution or acknowledgment hereof. In addition,
Trustor shall do such further acts as may be necessary or that
Beneficiary may reasonably request to carry out more effectively
the purposes of this Deed of Trust, to subject any property
intended to be encumbered hereby to the lien and security
interest hereof, and to perfect and maintain the lien and
security interest hereof.
6.8 When requested by Beneficiary, from time to time,
Trustor shall promptly deliver, in writing, such information as
Beneficiary shall reasonably request relating to the results of
the financial operation of the Trust Property. Upon ten (10)
days' request, Beneficiary may have access to Trustor's books and
records to enable Beneficiary to verify the results of the
financial operation of the Trust Property.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 Trustor is a (i) duly organized, validly existing and
in good standing under the laws of the state in which it is
organized; (ii) is qualified to do business and is in good
standing under the laws of the state in which the Trust Property
is located and in each state in which it is doing business;
(iii) has full power and authority to own its properties and
assets and to carry on its business as now conducted; and (iv) is
fully authorized and permitted to execute and deliver this Deed
of Trust. To Trustor's knowledge the execution, delivery and
performance by Trustor of this Deed of Trust and all other
documents and instruments relating to the Obligation will not
result in any material breach of the terms or conditions or
constitute a default under any agreement or instrument under
which Trustor is a party or is obligated. Trustor is not in
material default in the performance or observance of any
covenants, conditions or provisions of any such agreement or
instrument.
7.2 The liens, security interests and assignments created
hereby will be valid, effective, properly perfected and
enforceable liens, security interests and assignments.
7.3 All representations and warranties made herein shall
survive the execution hereof, the execution and delivery of all
other documents and instruments in connection with the
Obligation, and until the Obligation has been fully paid and
performed.
SECTION 8. DEFAULTS; REMEDIES
8.1 The occurrence of any of the following events or
conditions shall constitute an "Event of Default" under this Deed
of Trust:
(a) Any failure to pay any principal or interest or
any other part of the Obligation when the same shall become due
and payable and such failure continues for ten (10) days after
written notice thereof to Trustor. No notice, however, shall be
required after maturity of any of the Obligation.
(b) Any failure or neglect to perform or observe any
of the covenants, conditions, provisions or agreements of this
Deed of Trust, the Note, the Grant of Production Payment (the
"Royalty Agreement") of even date herewith by and between Trustor
and Beneficiary, and that Environmental Indemnification Agreement
(the "Indemnity Agreement") dated of even date herewith, by and
between Trustor and Beneficiary; or any other document or
instrument executed or delivered in connection with the
Obligation (other than a failure or neglect described in one or
more of the other provisions of this Paragraph 8.1) and such
failure or neglect either (i) continues unremedied for a period
of thirty (30) days after written notice thereof to Trustor, or
(iii) can be remedied, although not within thirty (30) days even
by prompt and diligent action, but such remedy is not commenced
within thirty (30) days written notice after thereof to Trustor
or is not diligently prosecuted to completion within a total of
one hundred twenty (120) days from the date of such notice.
(c) Any warranty, representation or statement
contained in this Deed of Trust, the Note, the Indemnity
Agreement, the Royalty Agreement, or any other document or
instrument executed or delivered in connection with the
Obligation, or made or furnished to Beneficiary by or on behalf
of Trustor, that shall be or shall prove to have been false when
made or furnished and such warranty, representation or statement
(i) continues unremedied for a period of thirty (30) days after
written notice thereof to Trustor, or (iii) can be remedied,
although not within thirty (30) days even by prompt and diligent
action, but such remedy is not commenced within thirty (30) days
written notice after thereof to Trustor or is not diligently
prosecuted to completion within a total of one hundred
twenty (120) days from the date of such notice.
(d) The filing by Trustor, (or against Trustor or to
which Trustor acquiesces or that is not dismissed within forty-
five (45) days after the filing thereof) of any proceeding under
the federal bankruptcy laws now or hereafter existing or any
other similar statute now or hereafter in effect; the entry of an
order for relief under such laws with respect to Trustor; or the
appointment of a receiver, trustee, custodian or conservator of
all or any part of the assets of Trustor.
(e) The insolvency of Trustor, or the execution by
Trustor of an assignment for the benefit of creditors; or the
convening by Trustor of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension
or composition of its debts; or the failure of Trustor to pay its
debts as they mature; or if Trustor is generally not paying its
debts as they mature.
(f) The admission in writing by Trustor that it is
unable to pay its debts as they mature or that it is generally
not paying its debts as they mature.
(g) The liquidation, termination or dissolution of
Trustor or any such endorser or guarantor, if a corporation,
partnership or joint venture.
(h) Any levy or execution upon, or judicial seizure
of, any portion of the Trust Property, the Personal Property, or
any other collateral or security for the Obligation.
(i) Any attachment or garnishment of, or the existence
or filing of any lien or encumbrance other than any Permitted
Exceptions against, any portion of the Trust Property, the
Personal Property, or any other collateral or security for the
Obligation, that is not removed or released within fifteen (15)
days after its creation.
(j) The institution of any legal action or proceedings
to enforce any lien or encumbrance upon any portion of the Trust
Property, the Personal Property, or any other collateral or
security for the Obligation, that is not dismissed within fifteen
(15) days after its institution.
(k) The abandonment by Trustor of all or any part of
the Trust Property.
(l) The existence of any encroachment upon the Trust
Property that has occurred without the approval of Beneficiary
that is not removed or corrected within thirty (30) days after
its creation.
(m) The demolition or destruction of, or any
substantial damage to, any portion of the Trust Property that is
not adequately covered by insurance, or the loss, theft or
destruction of, or any substantial damage to, any portion of the
Personal Property or any other collateral or security for the
Obligation, that is not adequately covered by insurance.
(n) Subject to Section 8.1(b) or 8.1(c) above, the
occurrence of any event of default under the Note, the Indemnity
Agreement, the Royalty Agreement, or any other document or
instrument executed or delivered in connection with the
Obligation.
8.2 Upon the occurrence of any Event of Default, and at any
time while such Event of Default is continuing, Beneficiary may
do one or more of the following:
(a) Declare the entire Obligation to be immediately
due and payable, and the same, with all costs and charges, shall
be collectible thereupon by action at law.
(b) Give such notice of default and of election to
cause the Trust Property to be sold as may be required by law or
as may be necessary to cause Trustee to exercise the power of
sale granted herein. Trustee shall then record and give such
notice of trustee's sale as then required by law and, after the
expiration of such time as may be required by law, may sell the
Trust Property at the time and place specified in the notice of
sale, as a whole or in separate parcels as directed by
Beneficiary, or by Trustor to the extent required by law, at
public auction to the highest bidder for cash in lawful money of
the United States, payable at time of sale, all in accordance
with applicable law. Trustee, from time to time, may postpone or
continue the sale of all or any portion of the Trust Property by
public declaration at the time and place last appointed for the
sale. No other notice of the postponed sale shall be required.
Upon any sale, Trustee shall deliver its deed conveying the
property sold, without any covenant or warranty, express or
implied, to the purchaser or purchasers at the sale. The
recitals in such deed of any matters or facts shall be conclusive
as to the accuracy thereof. Any person, including Trustor,
Trustee or Beneficiary, may purchase at the sale.
(c) Commence proceedings for foreclosure of this Deed
of Trust in the manner provided by law for the foreclosure of a
real property mortgage.
(d) Exercise any or all of the remedies of a secured
party under the Uniform Commercial Code with respect to the
Personal Property. If Beneficiary should proceed to dispose of
any of the Personal Property in accordance with the provisions of
the Uniform Commercial Code, ten (10) days' notice by Beneficiary
to Trustor shall be deemed to be commercially reasonable notice
under any provision of the Uniform Commercial Code requiring
notice. Trustor, however, agrees that all property of every
nature and description, whether real or personal, covered by this
Deed of Trust, together with all personal property used on or in
connection with the Premises or any business conducted thereon by
the Trustor and covered by separate security agreements, is
encumbered as one unit, that this Deed of Trust and such security
interests, at Beneficiary's option, may be foreclosed or sold in
the same proceeding, and that all property encumbered (both
realty and personalty), at Beneficiary's option, may be sold as
such in one unit as a going business, subject to the provisions
of applicable law.
(e) Without regard to the adequacy of any security for
the Obligation or the solvency of Trustor or any other person or
entity, send notifications to any and all lessees and tenants
under the Leases that all Rents shall be paid to Beneficiary.
Thereafter, Beneficiary shall be entitled to collect the Rents
until Trustor cures all Events of Default and may apply the Rents
collected at its sole discretion to the maintenance of the Trust
Property and/or the payment of the Obligation.
(f) Apply any funds in the possession or control of
Beneficiary under the provisions of Paragraph 5.6 hereof to the
payment of the Obligation, in lieu of the purposes specified in
that paragraph.
(g) Apply for and obtain, without regard to the
adequacy of any security for the Obligation or the solvency of
the Trustor or any other person or entity, a receiver by any
court of competent jurisdiction to take charge of all the Trust
Property, to manage, operate and carry on any business then being
conducted or that could be conducted on the Premises, to carry
on, protect, preserve, replace and repair the Trust Property, and
receive and collect all Rents and to apply the same to pay the
receiver's expenses for the operation of the Trust Property and
then in the manner provided in Paragraph 3.3 herein. Upon
appointment of said receiver, Trustor shall immediately deliver
possession of all of the Trust Property to such receiver.
Neither the appointment of a receiver for the Trust Property by
any court at the request of Beneficiary or by agreement with
Trustor nor the entering into possession of all or any part of
the Trust Property by such receiver shall constitute Beneficiary
a "mortgagee in possession" or otherwise make Beneficiary
responsible or liable in any manner with respect to the Trust
Property or the occupancy, operation or use thereof. Trustor
agrees that Beneficiary shall have the absolute and unconditional
right to the appointment of a receiver in any independent and/or
separate action brought by Beneficiary regardless of whether
Beneficiary seeks any relief in such action other than the
appointment of a receiver. In that respect, Trustor waives any
express or implied requirement under common law or A.R.S. 12-
1241 that a receiver may be appointed only ancillary to other
judicial or non-judicial relief.
(h) Without regard to the adequacy of any security for
the Obligation or the solvency of Trustor or any other person or
entity, enter upon and take possession of all or any part of the
Trust Property, either in person or by agent or employee, or by a
receiver appointed by a court of competent jurisdiction; Trustor
shall on written demand peaceably surrender possession of the
Trust Property to Beneficiary. Beneficiary, in its own name or
in the name of Trustor, may operate and maintain all or any part
of the Trust Property to such extent as Beneficiary deems
advisable, may rent and lease the same to such persons, for such
periods of time, and on such terms and conditions as Beneficiary
in its reasonable discretion may determine, and may sue for or
otherwise collect any and all Rents, including those past due and
unpaid. In dealing with the Trust Property as a beneficiary in
possession, Beneficiary shall not be subject to any liability,
charge, or obligation therefor to Trustor, other than for gross
negligence and wilful misconduct, and shall be entitled to
operate any business then being conducted or which could be
conducted thereon or therewith at the expense of and for the
account of Trustor (and all net losses, costs and expenses
thereby incurred shall be advances governed by Paragraph 6.6
hereof), to the same extent as the owner thereof could do, and to
apply the Rents to pay the receiver's expenses, if any, for the
operation of the Trust Property and then in the manner provided
in Paragraph 3.3 herein.
8.3 Trustor shall pay all reasonable costs and expenses,
including without limitation costs of title searches and title
policy commitments, Uniform Commercial Code searches, court costs
and reasonable attorneys' fees, incurred by Beneficiary in
enforcing payment and performance of the Obligation or in
exercising the rights and remedies of Beneficiary hereunder. All
such costs and expenses shall be secured by this Deed of Trust
and by all other lien and security documents securing the
Obligation. In the event of any court proceedings, court costs
and attorneys' fees shall be set by the court and not by jury and
shall be included in any judgment obtained by Beneficiary.
8.4 In addition to any remedies provided herein for an
Event of Default, Beneficiary shall have all other legal or
equitable remedies allowed under applicable law (including
specifically that of foreclosure of this instrument as though it
were a mortgage). No failure on the part of Beneficiary to
exercise any of its rights hereunder arising upon any Event of
Default shall be construed to prejudice its rights upon the
occurrence of any other or subsequent Event of Default. No delay
on the part of Beneficiary in exercising any such rights shall be
construed to preclude it from the exercise thereof at any time
while that Event of Default is continuing. Beneficiary may
enforce any one or more remedies or rights hereunder successively
or concurrently. By accepting payment or performance of any of
the Obligation after its due date, Beneficiary shall not thereby
waive the agreement contained herein that time is of the essence,
nor shall Beneficiary waive either its right to require prompt
payment or performance when due of the remainder of the
Obligation or its right to consider the failure to so pay or
perform an Event of Default. In any action by Beneficiary to
recover a deficiency judgment for any balance due under the Note
upon the foreclosure of this Deed of Trust or in any action to
recover the Obligation or Obligations secured hereby, and as a
material inducement to making the loan evidenced by the Note,
Trustor acknowledges and agrees that the successful bid amount
made at any judicial or non-judicial foreclosure sale, if any,
shall be conclusively deemed to constitute the fair market value
of the Premises, that such bid amount shall be binding against
Trustor in any proceeding seeking to determine or contest the
fair market value of the Premises and that such bid amount shall
be the preferred alternative means of determining and
establishing the fair market value of the Premises. Trustor
hereby waives and relinquishes any right to have the fair market
value of the Premises determined by a judge or jury in any action
seeking a deficiency judgment or any action on the Obligation or
Obligations secured hereby, including, without limitation, a
hearing to determine fair market value pursuant to A.R.S. 12-
1566, 33-814, 33-725 or 33-727.
SECTION 9. GENERAL PROVISIONS
9.1 Trustor shall defend, indemnify and hold harmless
Beneficiary, any successors to Beneficiary's interest in the
Trust Property, any purchaser of the Trust Property upon
foreclosure, and all shareholders, directors, officers, employees
and agents of all of the foregoing and their heirs, personal
representatives, successors and assigns from and against all
claims, costs, expenses, actions, suits, proceedings, losses,
damages and liabilities of any kind whatsoever, including but not
limited to all amounts paid in settlement of, and all reasonable
costs and expenses (including reasonable attorneys' fees)
incurred in defending or settling, any actual or threatened
claim, action, suit or proceeding, directly or indirectly arising
out of or relating to the Obligation, this Deed of Trust, or the
Trust Property, occurring from and after the sale of the Trust
Property to Trustor, including but not limited to (i) any
violation of or claim of violation of the ADA with respect to the
Trust Property; or (ii) any breach of any of the warranties,
representations and covenants contained herein. This indemnity
provision shall continue in full force and effect and shall
survive the payment and performance of the Obligation, the
release of record of the lien of this Deed of Trust, any
foreclosure (or action in lieu of foreclosure) of this Deed of
Trust, the exercise by Beneficiary of any other remedy under this
Deed of Trust or any other document or instrument evidencing or
securing the Obligation, and any suit, proceeding or judgment
against Trustor by Beneficiary hereon.
9.2 The acceptance of this Deed of Trust by Beneficiary
shall not be considered a waiver of or in any way to affect or
impair any other security that Beneficiary may have, acquire
simultaneously herewith, or hereafter acquire for the payment or
performance of the Obligation, nor shall the taking by
Beneficiary at any time of any such additional security be
construed as a waiver of or in any way to affect or impair the
security of this Deed of Trust; Beneficiary may resort, for the
payment or performance of the Obligation, to its several
securities therefor in such order and manner as it may determine.
9.3 Without notice or demand, without affecting the
obligations of Trustor hereunder or the personal liability of any
person for payment or performance of the Obligation, and without
affecting the lien or the priority of the lien of this Deed of
Trust, Beneficiary, from time to time, may: (i) extend the time
for payment of all or any part of the Obligation, accept a
renewal note therefor, reduce the payments thereon, release any
person liable for all or any part thereof, or otherwise change
the terms of all or any part of the Obligation; (ii) take and
hold other security for the payment or performance of the
Obligation and enforce, exchange, substitute, subordinate, waive
or release any such security; (iii) consent to the making of any
map or plat of the Trust Property; (iv) join in granting any
easement on or in creating any covenants, conditions or
restrictions affecting the use or occupancy of the Trust
Property; (v) join in any extension or subordination agreement;
or (vi) release or direct Trustee to release any part of the
Trust Property from this Deed of Trust. Any such action by
Beneficiary, or Trustee at Beneficiary's direction, may be taken
without the consent of any junior lienholder and shall not affect
the priority of this Deed of Trust over any junior lien.
9.4 Trustor waives and agrees not to assert: (i) any right
to require Beneficiary to proceed against any guarantor, to
proceed against or exhaust any other security for the Obligation,
to pursue any other remedy available to Beneficiary, or to pursue
any remedy in any particular order or manner; (ii) the benefits
of any legal or equitable doctrine or principle of marshalling;
(iii) the benefits of any statute of limitations affecting the
enforcement hereof; (iv) demand, diligence, presentment for
payment, protest and demand, and notice of extension, dishonor,
protest, demand and nonpayment, relating to the Obligation; and
(v) any benefit of, and any right to participate in, any other
security now or hereafter held by Beneficiary.
9.5 When all of the Obligation has been paid, Trustee (and
Beneficiary if necessary to clear title), upon payment of
Trustee's fees, shall promptly reconvey, without warranty, the
Trust Property to Trustor and Beneficiary shall promptly deliver
to Trustor the Note marked canceled and the Deed of Trust
whereupon this Deed of Trust shall be terminated for all
purposes. The recitals in such reconveyance of any matters or
facts shall be conclusive as to the accuracy thereof. The
grantee in such reconveyance may be described as "the person or
persons legally entitled thereto."
9.6 Beneficiary or Trustee, or both, shall have the right
to inspect the Trust Property at all reasonable times.
9.7 Time is of the essence hereof. If more than one
Trustor is named herein, the word "Trustor" shall mean all and
any one or more of them, severally and collectively. All
liability hereunder shall be joint and several. This Deed of
Trust shall be binding upon, and shall inure to the benefit of,
the parties hereto and their heirs, personal representatives,
successors and assigns. The term "Beneficiary" shall include not
only the original Beneficiary hereunder but also any future owner
and holder, including pledgees, of the Note. The provisions
hereof shall apply to the parties according to the context
thereof and without regard to the number or gender of words or
expressions used.
9.8 The acceptance by Trustee of this trust shall be
evidenced when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. The
trust created hereby is irrevocable by Trustor.
9.9 This Deed of Trust cannot be changed except by
agreement, in writing, signed by Trustor and Beneficiary.
9.10 No setoff or claim that Trustor now has or may in the
future have against Beneficiary shall relieve Trustor from paying
or performing the Obligation.
9.11 Each term, condition and provision of this Deed of
Trust shall be interpreted in such manner as to be effective and
valid under applicable law but if any term, condition or
provision of this Deed of Trust shall be held to be void or
invalid, the same shall not affect the remainder hereof which
shall be effective as though the void or invalid term, condition
or provision had not been contained herein. In addition, should
this instrument be or become ineffective as a deed of trust, then
these presents shall be construed and enforced as a realty
mortgage with the Trustor being the Mortgagor and Beneficiary
being the Mortgagee.
9.12 This Deed of Trust, the Obligation and the agreements
of any person or entity to pay or perform the Obligation shall be
governed by and construed according to the laws of the State of
Arizona.
9.13 All notices required or permitted to be given hereunder
shall be in writing and may be given in person or by United
States mail, by delivery service or by electronic transmission.
Any notice directed to a party to this Deed of Trust shall become
effective upon the earliest of the following: (i) actual receipt
by that party; (ii) delivery to the designated address of that
party, addressed to that party; or (iii) if given by certified or
registered United States mail, twenty-four (24) hours after
deposit with the United States Postal Service, postage prepaid,
addressed to that party at its designated address. The
designated address of a party shall be the address of that party
shown at the beginning of this Deed of Trust or such other
address as that party, from time to time, may specify by notice
to the other parties.
9.14 As further security for the payment and performance of
the Obligation, Beneficiary shall be subrogated to the lien,
although released of record, of any and all encumbrances paid
from the proceeds of any loan included in the Obligation.
IN WITNESS WHEREOF, these presents are executed as of the
date indicated above.
NORD COPPER CORPORATION, A Delaware
corporation
By /s/ Ray W. Jenner
Its VP-Finance
TRUSTOR
STATE OF ARIZONA )
) ss.
County of Pima )
The foregoing instrument was acknowledged before me this 8th
day of June, 1999, by Ray Jenner , the VP-Finance
of NORD COPPER CORPORATION, a Delaware corporation, on behalf of
that corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
/s/ Sue Utter
Notary Public
My commission expires:
February 22, 2003
EXHIBIT 10.130
When recorded, return to:
Streich Lang
One South Church Avenue
Suite 1700
Tucson, Arizona 85701
Attn: Steven R. Haydon, Esq.
GRANT OF PRODUCTION PAYMENT
(Johnson Camp)
THIS AGREEMENT, effective as of the 8th day of June, 1999,
is between NORD COPPER CORPORATION, a Delaware corporation
("NORD"), whose address is 201 3rd Street, N.W., Suite 1750,
Albuquerque, New Mexico 87102; and ARIMETCO, INC., a Nevada
corporation ("ARIMETCO"), whose address is 7739 East Broadway,
Suite 352, Tucson, Arizona 85710.
RECITALS
A. NORD is the owner of (1) certain patented mining
claims located in Cochise County, Arizona (the "Patented Mining
Claims"), more particularly described in Part l of Exhibit "A"
attached hereto; (2) certain fee lands located in Cochise County,
Arizona (the "Fee Lands"), more particularly described in Part 2
of Exhibit "A" attached hereto; and (3) certain unpatented mining
claims located in Cochise County, Arizona (the "Unpatented Mining
Claims"), more particularly described in Part 3 of Exhibit "A"
attached hereto.
B. The Patented Mining Claims, Fee Lands, and Unpatented
Mining Claims are herein collectively referred to as the "Mining
Property."
IN CONSIDERATION of TEN AND NO/100 DOLLARS ($10.00) and
other valuable consideration, the receipt and sufficiency of
which are acknowledged, and further in consideration of the
mutual covenants and conditions contained in this Agreement, the
parties agree as follows:
1. Grant of Payment Out of Production.
a. NORD grants to ARIMETCO a nonparticipating
payment out of production (the "Production Payment")
based upon the Average LME Cash Price for copper for
the calendar month in which copper produced from the
Mining Property is sold, as follows:
Average LME Price Production Payment
Less than $1.00 per pound None
Equal to or greater than $0.02 per pound sold
$1.00 per pound
until a total of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00)
is paid hereunder, at which time the Production Payment shall
automatically terminate.
b. "Average LME Cash Price" means the average
London Metals Exchange closing cash price, calculated
by dividing the sum of all such prices reported for the
month by the number of days for which such prices were
reported.
c. Upon the termination of the Production
Payment reserved herein ARIMETCO shall execute and
deliver to NORD a quit-claim deed, releasing, remixing,
and quitclaiming to NORD all of ARIMETCO's right,
title, and interest in and to the Mining Property,
together with all of Grantor's right, title, and
interest in and to the Production Payment herein
reserved.
2. Payment.
a. NORD shall make all payments due ARIMETCO
under this Agreement by check made payable to ARIMETCO
and transmitted to ARIMETCO as provided in the
paragraph entitled "Notices" or, at ARIMETCO's option,
by wire transfer to an account designated by ARIMETCO.
b. All payments shall be made on or before the
25th day of the calendar month following the calendar
month in which payment is received for copper produced
from the Mining Property.
c. Payments shall be accompanied by a statement
indicating the amount of copper sold, the prices for
which it was sold, and computation of the amount of the
payment. ARIMETCO shall be entitled to an independent
audit of the matters covered by the statement. The
audit shall be at ARIMETCO's expense, unless the audit
reveals an underpayment of five percent (5%) or more.
3. Inspection. ARIMETCO or ARIMETCO's authorized
representative may, at any reasonable time, inspect and copy any
records pertinent and necessary for the purpose of substantiating
the compliance of NORD with the provisions of this Agreement.
4. Amendments, Relocations, and Patents. If NORD amends
or relocates any or all of the unpatented mining claims included
in the Mining Property, or locates placer claims on ground
theretofore covered by lode claims or vice versa, or locates mill
sites on ground theretofore covered by mining claims or vice
versa, and or locates any fractions existing on the date of this
Agreement or resulting from the location, amendment, or
relocation of mining claims or mill sites, or if NORD obtains a
patent for any or all of the unpatented mining claims and mill
sites included in the Mining Property, the rights of ARIMETCO
under this Agreement shall extend to all such locations, amended
locations, relocations, and patented mining claims and mill
sites.
5. Change in Federal Mining Law. If the United States
establishes a leasing system or other system of tenure for lands
or minerals now subject to location under the mining laws, and if
NORD acquires rights under the new system in exchange for or in
modification of its existing rights, the rights of ARIMETCO under
this Agreement shall extend to the lease or other rights granted
by the new system.
6. Notices. All notices and other communications to
either party shall be in writing and shall be sufficiently given
if (i) delivered in person; (ii) sent by electronic facsimile
communication, with confirmation sent by registered or certified
mail, return receipt requested; or (iii) sent by registered or
certified mail, return receipt requested. All notices shall be
effective and shall be deemed delivered (i) if by personal
delivery, on the date of delivery; (ii) if by electronic
facsimile communication, on the date of receipt of the
communication; and (iii) if by mail, on the date of mailing.
Until a change of address is communicated as indicated above, all
notices to NORD shall be addressed:
NORD COPPER CORPORATION
201 3rd Street, N.W., Suite 1750
Albuquerque, New Mexico 87102
FAX: 505-766-9922
Attn: Ray Genner
and all notices to ARIMETCO shall be addressed:
ARIMETCO, INC.
7739 East Broadway, Suite 352
Tucson, Arizona 85710
FAX: (520) 748-2826
Attn: Roy Shipes
7. Assignment.
a. The rights of either party under this
Agreement may be assigned in whole or in part, subject
to the provisions set forth below.
b. No change or division in the ownership of the
Production Payment provided for in this Agreement,
however accomplished, shall enlarge the obligations or
diminish the rights of NORD. ARIMETCO covenants that
any change in ownership shall be accomplished in such a
manner that NORD shall be required to make payments and
to give notices to but one person, firm, or
corporation, and upon breach of this covenant, NORD may
retain all monies otherwise due to ARIMETCO until the
breach has been cured. No change or division in
ownership shall be binding on NORD until thirty (30)
days after ARIMETCO has given NORD a certified copy of
the recorded instrument evidencing the change or
division.
8. Inurement. All covenants, conditions, limitations, and
provisions contained in this Agreement apply to and are binding
upon the parties to this Agreement, their heirs, representatives,
successors, and assigns.
9. Modification. No modification, variation, or amendment
of this Agreement shall be effective unless it is in writing and
is signed by all parties to this Agreement.
10. Waiver. No waiver of any provision of this Agreement,
or waiver of any breach of this Agreement, shall be effective
unless the waiver is in writing and is signed by the party
against whom the waiver is claimed. No waiver of any breach
shall be deemed to be a waiver of any other or subsequent breach.
11. Construction.
a. The paragraph headings are for convenience
only, and shall not be used in the construction of this
Agreement.
b. The invalidity of any provision of this
Agreement shall not affect the enforceability of any
other provision of this Agreement.
12. Governing Law. THE VALIDITY OF THIS AGREEMENT AND ALL
OTHER DOCUMENTS EXECUTED AND DELIVERED HEREWITH, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA
(INCLUDING THE BANKRUPTCY CODE), IT BEING THE INTENT OF THE
PARTIES THAT FEDERAL LAW SHALL GOVERN THE RIGHTS AND DUTIES OF
THE PARTIES HERETO WITHOUT REGARD TO THE APPLICATION OF ANY
PROVISION OF STATE LAW. TO THE EXTENT THAT FEDERAL LAW WOULD
APPLY THE LAW OF ANY STATE AS THE FEDERAL RULE FOR THE PURPOSES
OF THIS AGREEMENT, THE PARTIES AGREE THAT THE LAWS OF THE STATE
OF ARIZONA SHALL BE USED TO SUPPLEMENT APPLICABLE FEDERAL LAW.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE BANKRUPTCY COURT. NORD AND ARIMETCO WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 12.
NORD AND ARIMETCO HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. NORD AND ARIMETCO REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
13. Covenant Running With Land. This Agreement and the
Production Payment shall constitute a covenant running with the
Mining Property. ARIMETCO may take such actions as it deems
necessary and appropriate to effectuate the covenant including
recording this Agreement against the Mining Property.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
NORD COPPER CORPORATION,
a Delaware corporation
By: /s/ Ray W. Jenner
Its: VP-Finance
ARIMETCO, INC.,
a Nevada corporation
By: /s/ H. R. Shipes
Its: President
STATE OF ARIZONA )
) ss.
County of Pima )
The foregoing document was acknowledged before me this _____
day of __________, 1999, by ________________________, the
____________________ of NORD COPPER CORPORATION, a Delaware
corporation, on behalf of that corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
/s/ Sue Utter
Notary Public
My commission expires:
February 22, 2003
STATE OF ARIZONA )
) ss.
County of Pima
The foregoing document was acknowledged before me this _____
day of June, 1999, by H. Roy Shipes, the President of ARIMETCO,
INC., a Nevada corporation, on behalf of that corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
/s/ Sue Utter
Notary Public
My commission expires:
February 22, 2003
EXHIBIT 99.1 NEWS RELEASE
Nord Resources Acquires Johnson Camp Mine, Arizona
Albuquerque, New Mexico, June 9, 1999 - - Nord Resources
Corporation (NYSE: NRD) announced today that it had acquired the
Johnson Camp Mine, Cochise County, Arizona, which is currently
being operated on a maintenance basis. To acquire the property,
Nord issued 1.6 million shares of its common stock to Summo
Minerals Corporation (TSE: SMA) in exchange for Summo's
proprietary data and purchase rights, and Nord completed the
purchase of the Johnson Camp Mine from Arimetco, Inc. for the
price of $1.86 million, $310,000 of which was paid on closing and
the remainder payable in annual installments over three years.
Since 1975 the Johnson Camp Mine has produced over 150 million
pounds of cathode copper from open pit mining, heap leaching and
solvent extraction-electrowinning (SX-EW) processing of oxide
ores. Although significant reserves remain, mining operations
ceased in 1997. Heap leaching continues and the mine is
producing 1 to 2 million pounds of copper annually.
A detailed feasibility study to restart the Johnson Camp
Mine was completed in April 1999 by an experienced independent
engineering firm. The feasibility study demonstrates that the
mine could produce cathode copper at an average cash cost of
$0.53/lb. for the first six years of operation. Production
capacity would be 18.9 million pounds per annum. Life-of-mine
capital costs are estimated to be $15.3 million including
acquisition costs and working capital. Proven and probable oxide
reserves would allow for operation at full capacity for a minimum
of ten years. Exploration targets remain to be drilled which
could expand oxide reserves significantly. Additionally, the
property contains potential for discovery of a major porphyry
copper sulfide deposit underlying the oxide mineralization.
The Johnson Camp property is located in southeastern Arizona
65 miles east of Tucson and totals 2,723 acres consisting of
patented and unpatented mining claims and fee simple lands. The
existing facilities include a 4,000-gpm solvent extraction plant,
a tank farm, a 52,000 ppd capacity electrowinning plant with 74
electrowinning cells, four solution storage ponds with a capacity
of eight million gallons, a truck shop, core storage building,
administrative and engineering office and warehouse, laboratory,
plant mechanical shop, a crusher station dump pocket and adjacent
fuel storage tanks, and various other equipment.
Under an arrangement with the Company's affiliate, Nord
Pacific Limited, which operates a SX-EW copper mine in Australia
and was instrumental in identifying and assessing the Johnson
Camp opportunity, Nord Pacific will participate in management of
the Johnson Camp Mine and will be entitled to 20% of cash flow
after Nord Resources has fully recovered its past and future
investment in the property.
Dr. Pierce Carson, CEO, stated that the Johnson Camp Mine
represented an excellent opportunity for the Company to acquire,
under favorable terms, a fully engineered and permitted SX-EW
copper mine in the United States. At higher copper prices, the
mine could be returned to
production quickly, at the annual rate of 18.9 million pounds of
cathode copper and would be capable of generating significant
cash flow. Conversion of current drill-indicated resources into
reserves would allow for low-cost expansion of the existing
facility to produce over 40 million pounds of cathode copper
annually. Furthermore, the upside exploration potential could
lead eventually to discovery of a major porphyry copper deposit.
Nord Resources Corporation owns a 50% interest in Sierra
Rutile Limited, a West African rutile (titanium dioxide) mine
shut down since 1995. The Company also owns a 28.5% interest in
Nord Pacific Limited (OTCBB: NORPF; Toronto: NPF), a diversified
international resource company engaged in the production of
copper and the exploration for and development of base and
precious metals and strategic minerals including copper, gold,
silver, nickel and cobalt. Nord Pacific's activities are located
in Australia, Papua New Guinea, Mexico, Canada and the United
States.
Safe Harbor Statement under the Private Securities
Litigation Act of 1995: The statements contained in this release
which are not historical fact are "forward looking statements"
that involve various important risks, uncertainties and other
factors which could cause the Company's actual results to differ
materially from those expressed in such forward looking
statements. These factors include, without limitation the risk
factors disclosed in the Company's securities filings.
For information contact: Pierce Carson, Chief Executive Officer, or
Ray Jenner, Chief Financial Officer
(505) 766-9955
Website: www.nordresources.com
