AGREEMENT AND PLAN OF MERGER
OF
J.A.B. INTERNATIONAL TRADING CO.
AS THE "MERGED CO"
into
BRUSH CREEK MINING AND DEVELOPMENT CO., INC.
AS THE "COMPANY"
DATED: APRIL 12, 1999
TABLE OF CONTENTS
ARTICLE I......................................................................................................1
DEFINITIONS....................................................................................................1
1.1 Defined Terms........................................................................................1
1.2 Other Defined Terms..................................................................................6
ARTICLE 2......................................................................................................6
PURCHASE AND EXCHANGE OF STOCK.................................................................................7
2.2 The Merger...........................................................................................7
2.3 Merger Conversion....................................................................................7
2.7 Dissenting Shareholders..............................................................................8
2.8 No Further Rights or Transfers.......................................................................8
2.9 Articles of Incorporation, Registered Agent of the Surviving Corporation.............................8
2.10 Directors and Officers of the Surviving Corporation..................................................8
2.11 Tax-Free Reorganization..............................................................................9
ARTICLE 3......................................................................................................9
CLOSING........................................................................................................9
3.1 Closing..............................................................................................9
3.2 Deliveries at Closing................................................................................9
ARTICLE 4.....................................................................................................10
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................................10
4.1 Organization; Capitalization........................................................................10
4.2 Authorization.......................................................................................10
4.3 Consents and Approvals..............................................................................11
4.4 Title to Assets.....................................................................................11
4.5 Facilities..........................................................................................11
4.6 Contracts; No Defaults..............................................................................12
4.7 No Conflict or Violation............................................................................13
4.8 Audited Financial Statements........................................................................13
4.9 Absence of Certain Changes or Events................................................................13
4.10 No Undisclosed Liabilities..........................................................................15
4.11 Accounts Receivable.................................................................................15
4.12 Inventories.........................................................................................15
4.13 Intellectual Property Rights........................................................................15
4.14 Litigation..........................................................................................16
4.15 Labor Matters.......................................................................................17
4.16 Compliance with Law; Permits........................................................................17
4.17 Taxes...............................................................................................17
4.18 Severance Arrangements..............................................................................18
4.19 Insurance...........................................................................................18
4.20 Purchase Commitments and Outstanding Bids...........................................................19
4.21 Suppliers...........................................................................................19
4.22 Bank Accounts.......................................................................................19
4.23 Environmental Matters...............................................................................19
4.24 Employee Benefit Plans..............................................................................21
4.25 No Brokers..........................................................................................23
4.26 No Other Agreements to Sell the Assets or Capital Stock of the Company............................23
4.27 Books and Records...................................................................................23
4.28 Americans With Disabilities Act Compliance..........................................................23
4.29 Material Misstatements Or Omissions.................................................................23
4.30 Investments.........................................................................................23
4.31 Insider Interests...................................................................................23
4.32 Tax Free Reorganization.............................................................................24
ARTICLE 5.....................................................................................................25
REPRESENTATIONS AND WARRANTIES OF MERGED CO...................................................................25
5.1 Organization of Merged Co and Mergeco...............................................................25
5.2 Authorization.......................................................................................25
5.3 No Conflict or Violation............................................................................25
ii
5.4 Consents and Approvals..............................................................................25
5.5 No Brokers..........................................................................................26
5.6 Securities Act of 1933..............................................................................26
ARTICLE 6.....................................................................................................26
COVENANTS OF THE STOCKHOLDERS, THE COMPANY, AND MERGED CO.....................................................26
6.1 Further Assurances..................................................................................26
6.2 Conduct of Business.................................................................................26
6.3 Records.............................................................................................28
6.4 Access to Contracts, Books and Records..............................................................28
6.5 Environmental.......................................................................................28
6.6 Financial Statements................................................................................29
6.7 Notification of Certain Matters.....................................................................29
6.8 No Mergers, Consolidations, Sale of Stock Etc.......................................................29
6.9 Landlord Consents...................................................................................29
6.10 Payment of Indebtedness by Affiliates...............................................................29
6.11 Approval of Shareholders............................................................................30
6.12 Dissenters' Rights..................................................................................30
6.13 Certificates of Merger..............................................................................30
ARTICLE 7.....................................................................................................30
CONDITIONS TO MERGED CO'S OBLIGATIONS.........................................................................30
7.1 Representations, Warranties and Covenants...........................................................30
7.2 No Injunction.......................................................................................30
7.3 Certificates........................................................................................30
7.4 Corporate Documents.................................................................................30
7.5 Due Diligence.......................................................................................30
ARTICLE 8.....................................................................................................30
CONDITIONS TO MERGED CO'S OBLIGATION..........................................................................30
8.1 Representations, Warranties and Covenants...........................................................30
8.2 Consents; Regulatory Compliance and Approval........................................................31
8.3 No Governmental Proceedings or Litigation...........................................................31
8.4 Due Diligence.......................................................................................31
8.5 No Injunction.......................................................................................31
8.6 Certificates........................................................................................31
ARTICLE 9.....................................................................................................31
ACTIONS BY THE PARTIES AFTER THE CLOSING......................................................................31
9.1 Books and Records...................................................................................31
9.2 Survival of Representations, Etc....................................................................31
9.3 Indemnification.....................................................................................32
9.4 Certain Tax Matters.................................................................................34
ARTICLE 10..................................................................................................34
MISCELLANEOUS.................................................................................................34
10.1 Assignment..........................................................................................34
10.2 Notices; Transfer of Funds..........................................................................34
10.3 Choice of Law.......................................................................................35
10.4 Submission to Jurisdiction..........................................................................35
10.5 Entire Agreement, Amendments and Waivers............................................................35
10.6 Multiple Counterparts...............................................................................35
10.7 Expenses............................................................................................35
10.8 Invalidity..........................................................................................36
10.9 Titles; Gender......................................................................................36
10.10 Publicity.........................................................................................36
10.11 Burden and Benefit................................................................................36
10.12 Cumulative Remedies...............................................................................36
10.13 WAIVER OF JURY TRIAL..............................................................................36
iii
AGREEMENT AND PLAN OF MERGER
This Agreement ("'Agreement") dated as of March 30, 1999, is by and
between J.A.B. INTERNATIONAL TRADING CO., a Florida corporation ("Merged Co"),
and BRUSH CREEK MINING AND DEVELOPMENT CO., INC., a Nevada corporation (the
"Company").
BACKGROUND
A. The Stockholders own a majority of the issued and outstanding
capital stock of Merged Co.
B. The parties wish to provide for the terms and conditions upon which
a merger of Merged Co with the Company would be consummated.
C. The Boards of Directors of Merged Co and the Company have approved
the merger of the constituent corporations pursuant to the terms of this
Agreement.
D. Merged Co and the Company desire to make certain representations,
warranties, covenants, and agreements in connection with the transactions
contemplated by this Agreement.
E. The parties desire to effect this transaction in one or more
transactions that together will constitute a tax-free merger under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code, to the extent provided therein.
TERMS OF AGREEMENT
In consideration of the mutual covenants and promises contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the
following meanings. Any of these terms, unless the context otherwise requires,
may be used in the singular or plural depending upon the reference.
"ADA" shall mean the Americans with Disabilities Act of 1990.
"Affiliate" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
"Assets" shall mean all of the Company's right, title and
interest in and to all properties, assets and rights of any kind, whether
tangible or intangible, real or personal, owned by the Company or in which the
Company has any interest whatsoever, including, without limitation, all of the
Company's right, title and interest in the following:
(a) all accounts and notes receivable, refunds or
deposits and prepaid expenses (including, without limitation, any prepaid
insurance premiums);
(b) all cash and cash equivalents;
(c) all Contract Rights;
(d) all Leases;
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 1
(e) all Leasehold Estates;
(f) all Leasehold Improvements;
(g) all Owned Real Property;
(h) all Fixtures and Equipment;
(i) all Inventory;
(j) all Books and Records;
(k) all Intellectual Property Rights;
(l) all Claims;
(m) all Insurance Policies;
(n) all Permits;
(o) all computers and software and software licenses; and
(p) all available supplies, sales literature, promotional
literature, customer, supplier and distributor lists, art work, display units,
telephone and fax numbers and purchasing records of the Company; and guaranties
made by suppliers in connection with the Assets or services furnished to the
Company.
"Audited Balance Sheet Date" shall mean June 30, 1998.
"Audited Balance Sheet" shall mean the audited balance sheet
of the Company, together with the notes thereto, dated the Audited Balance Sheet
Date.
"Audited Financial Statements" shall mean (i) the Company's
audited balance sheets dated June 30, 1996, June 30, 197, and June 30, 1998, and
the related statements of income, shareholders' equity, and cash flows for each
of the three fiscal years then ended and accompanied by the report of the
Company's Auditor.
"Benefit Arrangement: shall mean any employment, consulting,
severance or other similar contract, arrangement or policy and each plan,
arrangement (written or oral), program, agreement or commitment providing for
insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, life, health, disability or accident benefits
(including, without limitation, any "voluntary employees' beneficiary
association" as defined in Section 501(c)(9) of the Code providing for the same
or other benefits) or for deferred compensation, profit-sharing bonuses, stock
options, stock appreciation rights, stock purchases or other forms of incentive
compensation or post-retirement insurance, compensation or benefits that (i) is
not a Welfare Plan, Pension Plan or Multi-employer Plan, (ii) is entered into,
maintained, contributed to or required to be contributed to, as the case may be,
by the Company or an ERISA Affiliate or under which the Company or any ERISA
Affiliate may incur any liability, and (iii) covers any employee or former
employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
"Books and Records" shall mean all books, records, lists,
ledgers, files, reports, plans, drawings and operating records of any kind
pertaining to the Company, including, without limitation, all corporate and tax
books and records of the Company.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 2
"Claims" shall mean all claims, causes of action, chooses in
action, rights of recovery and rights of set-off of whatever kind or description
against any person or entity arising out of or relating to the Assets or
relating to the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations.
"Company Stock" shall mean shares of the Company's common
stock, par value $0.0001 per share.
"Contract" shall mean any of the agreements, contracts,
Leases, notes, loans, evidence of indebtedness, purchase orders, letters of
credit, franchise agreements, undertakings, covenants not to compete, employment
agreements, licenses, instruments, obligations, commitments, policies, purchase
and sales orders, quotations and other executory commitments to which the
Company is a party or to which any of the Assets is subject, whether oral or
written, express or implied.
"Contract Rights" shall mean all of the Company's rights and
obligations under each Contract.
"Disclosure Schedules" shall mean the schedules executed and
delivered by the Company and Stockholders to Merged Co which set forth any
exceptions to the representations and warranties contained in Article 4 hereof
and certain other information called for by Article 4 hereof and other
provisions of this Agreement. Unless otherwise specified, each reference in
Article 4 to any numbered section is a reference to that numbered section which
is included in the Disclosure Schedules. The Disclosure Schedules will be
attached collectively to this Agreement.
"Employee Plans" shall mean all Benefit Arrangements,
Multi-employer Plans, Pension Plans and Welfare Plans.
"Encumbrance" shall mean any claim, lien, pledge, option,
charge, easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other rights of third parties, whether voluntarily incurred or
arising by operation of law, and includes, without limitation, any agreement to
give any of the foregoing in the future and any contingent sale or other title
retention agreement or lease in the nature thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall mean any entity which is (or at any
relevant time was) a member of a "controlled group of corporations" with or
under "common control" with the Company as defined in Section 414(b) or (c) of
the Code.
"Facilities" shall mean all plants, offices, manufacturing
facilities, stores, warehouses, improvements, administration buildings, and all
real property and related facilities owned or leased by the Company.
"Facility Leases" shall mean all of the Leases of Facilities.
"Fixtures and Equipment" shall mean all of the furniture,
fixtures, furnishings, machinery and equipment, spare parts, supplies, Vehicles
and other tangible personal property owned by the Company and located in, at or
upon the Facilities as of the Audited Balance Sheet Date plus all additions,
replacements or deletions since the Audited Balance Sheet Date.
"401(k) Plan" shall mean the 401(k) Profit Sharing Plan for
Employees of the Company.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, as in effect from time to time, consistently
applied.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 3
"Indebtedness" shall mean, at any date, without duplication,
(i) all obligations of the Company for borrowed money properly recordable as a
liability on the financial statements of the Company, (ii) all obligations
properly recordable as a liability on the financial statements of the Company,
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of the Company to pay the deferred purchase price of property except
trade accounts payable arising in the ordinary course of business, (iv) the net
present value of future minimum lease payments under capital leases, (v) all
Indebtedness (as defined in clauses (i) through (iv) above) of others secured by
a lien on any asset of the Company, whether or not such Indebtedness is assumed
by the Company, and (vii) all Indebtedness (as defined in clauses (i) through
(v) above) of others guaranteed by the Company.
"Insurance Policies" shall mean the insurance policies
relating to the Assets or relating to the Company listed in Disclosure Schedule
4.19.
"Inventory" shall mean (a) all of the Company's inventories
within the Facilities or wherever otherwise located held for resale or lease to
the Company's customers, (b) all office supplies and similar materials of the
Company located in the Facilities or wherever otherwise located, and (c) all of
the raw materials, work in process, spare parts, finished products, wrapping,
supply and packaging items, employee uniforms and similar items of the Company
in the Facilities or wherever otherwise located.
"Leasehold Estates" shall mean all of the Company's rights and
obligations as lessees under the Leases listed on a Disclosure Schedule.
"Leasehold Improvements" shall mean all of the leasehold
improvements situated in or on the property leased under the Leases.
"Leases" shall mean all of the leases of the Company listed on
a Disclosure Schedule and all other leases relating to the Assets that are not
required to be scheduled pursuant to this Agreement.
"Material Adverse Effect" shall mean a material adverse effect
on the financial condition, business, earnings, results of operations, assets,
liabilities, or operations of the Company.
"Merged Co Common Stock" shall mean the Common Stock of Merged
Co, $0.0 par value per share.
"Merged Co Shares" shall mean the issued and outstanding
shares of Merged Co Common Stock.
"Multi-employer Plan" shall mean any "multi-employer plan," as
defined in Section 4001(a)(3) of ERISA, (1) which the Company or any ERISA
Affiliate maintains, administers, contributes to or is required to contribute
to, or, after September 25, 1980, maintained, administered, contributed to or
was required to contribute to, or under which the Company or any ERISA Affiliate
may incur any liability and (2) which covers any employee or former employee of
the Company or any ERISA Affiliate (with respect to their relationship with such
entities).
"Organizational Documents" shall mean (a) the articles or
certificate of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the limited liability company agreement and the
certificate of formation (or similar document) of a limited liability company;
(e) any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (f) any amendment to any
of the foregoing.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 4
"Owned Real Property" shall mean all real property owned in
fee by the Company, including, without limitation, all rights, easements and
privileges appertaining or relating thereto, all buildings, fixtures and
improvements located thereon, and all Facilities thereon, if any.
"PBGC" shall mean the Pension Benefits Guaranty Corporation.
"Pension Plan" shall mean any "employee pension benefit plan"
as defined in Section 3(2) of ERISA (other than a Multi-employer Plan) (1) which
the Company or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the five years prior to the Closing Date,
maintained, administered, contributed to or was required to contribute to, or
under which the Company or any ERISA Affiliate may incur any liability and (2)
which covers any employee or former employee of the Company or any ERISA
Affiliate (with respect to their relationship with such entities).
"Permits" shall mean all licenses, permits and other
governmental authorizations necessary to carry on the business of the Company as
presently conducted and as proposed to be conducted.
"Person" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, labor union or other entity
or governmental body.
"Regulations" shall mean any laws, statutes, ordinances,
regulations, rules, notice requirements, agency guidelines and orders of any
federal, state or local government and any other governmental department or
agency, including, without limitation, Environmental Laws, energy, motor vehicle
safety, public utility, zoning, building and health codes, occupational safety
and health laws and laws respecting employment practices, employee
documentation, terms and conditions of employment and wages and hours.
"Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
"Stockholder" shall mean those stockholders of Merged Co
owning a majority of the issued and outstanding capital stock of Merged Co and
consenting to the Merger.
"Subsidiary" shall mean (i) any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain; (ii) any partnership in which the Company
is a general partner; or (iii) any partnership in which the Company possesses a
50% or greater interest in the total capital or total income of such
partnership.
"Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, license, capital stock, franchise, profits, payroll,
employment, withholding, social security, unemployment, disability, real
property, ad valorem/personal property, stamp, excise, occupation, sales, use,
transfer, environmental, customs duties, value added, alternative or add-on
minimum, estimated or other tax, including any interest, penalty or addition
thereto, whether disputed or not.
"Tax Returns" shall mean any return, declaration, report,
claim for refund, information return or statement or other document (including
schedules or any related or supporting information), and including any amendment
thereof, filed or required to be filed with any governmental entity or other
authority in connection with the determination, assessment or collection of any
Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.
"Total Merger Consideration" shall mean the total of nine
million three hundred eighty thousand (9,380,000) newly issued shares of Company
Stock issued upon conversion of Merged Co Shares, subject to adjustment as
provided in Section 2.2.3.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 5
"Treasury Regulations" shall mean the applicable regulations
promulgated under the Code.
"Vehicles" shall mean all automobiles and other vehicles owned
or leased by the Company.
"Warranty Claims" shall mean all Damages and related costs and
expenses arising out of product warranty claims and customer claims for damages
(whether to property or person, in contract or tort) as set forth in Section
10.3.1.
"Welfare Plan" shall mean any "employee welfare benefit plan"
as defined in Section 3(l) of ERISA, (1) which the Company or any ERISA
Affiliate maintains, administers, contributes to or is required to contribute
to, or under which the Company or any ERISA Affiliate may incur any liability
and (2) which covers any employee or former employee of the Company or any ERISA
Affiliate (with respect to their relationship with such entities).
1.2 OTHER DEFINED TERMS. In addition to the terms defined in the
Recitals to this Agreement and Section 1.1 hereof, the following terms shall
have the meanings defined for such terms in the Sections set forth below:
TERM SECTION
---- -------
AAA 9.3.1
Act 5.7
Actions 4.14
Certificates 3.2.1
Claim Notice 9.3.2
Closing 3.1
Closing Date 3.1
Computer Software 4.13.1
Constituent Corporations 2.1.1
Damages 9.3.6
Dissenting Shares 2.3
Effective Time 2.1.2
Entity 6.2
Environmental Claims 4.23.8(ii)
Environmental Conditions 4.23.8(iii)
Environmental Laws 4.23.8(i)
Hazardous Substances 4.23.8(iv)
Indemnity Claim 9.3.2
Intellectual Property Rights 4.13.1
Leased Property 4.5.4
Merged Co Stockholders 3.2.1
Merger 2.1.1
Merger Documents 2.1.2
Option 2.2.2
Per Share Merger Consideration 2.2.1
Personnel 4.9(b)(i)
Principal Stockholder 4.6
Surviving Corporation 2.1.1
ARTICLE 2
PLAN OF MERGER
2.1 THE MERGER.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 6
2.1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as such term is defined in Section 2.1.2
hereof), Merged Co shall be merged with and into the Company (the "Merger") in
accordance with the provisions of the merger laws of the State of Florida and
the State of Nevada, and the separate corporate existence of Merged Co shall
cease, and the Company shall continue as the surviving corporation under the
laws of the State of Nevada under its current name (the "Surviving
Corporation"). Merged Co and the Company are sometimes hereinafter referred to
collectively as the "Constituent Corporations." It is the intent of the parties
that the transfers and exchanges contemplated in connection with the Merger
under this Agreement be nontaxable as provided and to the extent set forth under
Sections 368(a)(1)(A), 368(a)(2)(B), and 354 of the Code and the provisions
related thereto. The parties acknowledge that only cash items, indebtedness or
securities received in exchange for capital stock in Merged Co will be subject
to federal income taxes to the extent of any gain recognized in the transaction.
2.1.2 EFFECTIVE TIME OF MERGER. The Merger shall become
effective at the time of filing of appropriate certificates or articles of
merger with the Secretary of State of the State of Nevada in accordance with the
provisions of the laws of Nevada (the "Merger Documents"), or at such later time
in accordance with the provisions of the laws of Nevada as is specified in the
Merger Documents. The Merger Documents shall be filed at the time of the Closing
(as such term is defined in Section 3.1 hereof). The date and time when the
Merger shall become effective is hereinafter referred to as the "Effective
Time."
2.1.3 EFFECT OF MERGER. At the Effective Time, the
Surviving Corporation shall thereupon and thereafter possess all assets and
property of every description, and every interest therein, wherever located, and
the rights, privileges, immunities, powers, franchises, and authority, of a
public as well as of a private nature, of each of the Constituent Corporations.
All obligations belonging to or due to each of the Constituent Corporations, all
of which shall be vested in the Surviving Corporation without further act or
deed, and the title to any real estate or any interest therein vested in either
of the Constituent Corporations shall not revert or in any way be impaired by
reason of the Merger. The Surviving Corporation shall be liable for all
obligations of each of the Constituent Corporations, including liability to
dissenting shareholders, and any claim existing, or action or proceeding pending
by or against either of the Constituent Corporations, may be prosecuted to
judgment, with right of appeal, as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place, and all rights of
creditors of each Constituent Corporation shall be preserved unimpaired, and all
liens upon the property of either of the Constituent Corporations shall be
preserved unimpaired, on only the property affected by such liens immediately
prior to the Effective Time, all with the effect set forth in the laws of the
state of Florida.
2.2 MERGER CONVERSION. At the Effective Time, by virtue of the Merger
and without any action on the part of Merged Co, the Company, or the holder of
any of the securities of Merged Co, the following shall occur:
2.2.1 CONVERSION OF MERGED CO SHARES. Each Merged Co Share
issued and outstanding immediately prior to the Effective Time (other than
Dissenting Shares, as defined in Section 2.4 below, Merged Co Shares owned by
Merged Co or any subsidiary of Merged Co, and Merged Co Shares held in the
treasury of Merged Co) shall be converted into and represent the right to
receive one (1) share of newly issued Company Stock ("Per Share Merger
Consideration").
2.2.2 CONVERSION OF OPTIONS. All outstanding options,
warrants, and other rights to purchase Merged Co Shares (an "Option") that are
vested as of the Effective Time shall be converted into and represent the right
to receive for each Merged Co Share represented by such Option, an amount equal
to the Per Share Merger Consideration less the exercise price of such Option per
Merged Co Share.
2.3 DISSENTING SHAREHOLDERS. Notwithstanding anything in this Agreement
to the contrary, but only in the circumstances and to the extent provided by the
laws of the State of Florida, Merged Co Shares which are outstanding immediately
prior to the Effective Time and which are held by shareholders (other than
Merged Co or any subsidiary of Merged Co) who were entitled to and did not
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 7
vote such shares in favor of the Merger and who shall have properly and timely
delivered to Merged Co a written demand for payment of the fair value of Merged
Co Shares in the manner provided in, and complied with all of the relevant
provisions of the laws of the State of Florida ("Dissenting Shares") shall not
be converted into the right to receive, or be exchangeable for, the Per Share
Merger Consideration but, instead, the holders thereof shall be entitled to such
rights as are granted by the laws of the State of Florida; provided, however,
that (i) if any holder of Dissenting Shares shall subsequently deliver a written
withdrawal of his demand for payment of the fair value of such Merged Co Shares
and the Board of Directors shall consent thereto, or (ii) if any holder fails to
establish and perfect his entitlement to the relief provided in the laws of the
State of Florida or if the right of such holder to receive relief otherwise
terminates pursuant to the laws of the State of Florida, such Merged Co Shares
shall thereupon be deemed to have been converted into the right to receive, and
to have become exchangeable for, as of the Effective Time, the Per Share Merger
Consideration. Merged Co shall give the Company (i) prompt notice of any written
objections, demands for payment, withdrawals of demands for payment and any
other instrument served pursuant to the laws of the State of Florida received by
Merged Co and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for payment under the laws of the State of
Florida. Prior to the Effective Time, Merged Co will not voluntarily make any
Payment with respect to any demands for payment and will not, except with the
prior written consent of the Company, settle or offer to settle any such
demands.
2.4 NO FURTHER RIGHTS OR TRANSFERS. At and after the Effective Time,
the holder of a Certificate or of Dissenting Shares shall cease to have any
rights as a shareholder of Merged Co, except for, in the case of the holder of a
Certificate or the holder of Dissenting Shares to whom the provision in Section
2.3 hereof applies, the right to surrender Certificates in the manner prescribed
by Section 3.2.2 in exchange for payment of the Total Merger Consideration or,
in the case of the holder of Dissenting Shares, the right to perfect the right
to receive payment for Dissenting Shares pursuant to the laws of the State of
Florida. At the Effective Time, the stock transfer books of Merged Co shall be
closed, and no further transfer of Merged Co Shares shall be made.
2.5 ARTICLES OF INCORPORATION, REGISTERED AGENT OF THE SURVIVING
CORPORATION. The Certificate or Articles of Incorporation of the Company, as in
effect immediately prior to the Effective Time, shall be the Certificate or
Articles of Incorporation of the Surviving Corporation, except that effective
upon the Merger, the name of the Surviving Corporation shall be changed to
J.A.B. International, Inc. and as such Certificate or Articles of Incorporation
otherwise may be amended by certificate or Articles of Merger, until thereafter
amended as provided by law, and the name and address of the registered agent of
the Company immediately prior to the Effective Time shall be the name and
address of the registered agent upon whom any process, notice or demand against
either of the Constituent Corporations or the Surviving Corporation may be
served.
2.6 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. Effective
immediately following the Effective Time, those directors of the Company
designated by Merged Co shall resign, and those individuals designated by Merged
Co shall be added to the board, which group shall be the directors of the
Surviving Corporation, to hold office, subject to the applicable provisions of
the Certificate or Articles of Incorporation of the Surviving Corporation until
the next annual shareholders' meeting of the Surviving Corporation and until
their respective successors shall be duly elected or appointed and shall duly
qualify. Effective immediately following the Effective Time, the officers of the
Company shall resign such positions and, subject to the applicable provisions of
the Articles of Incorporation of the Surviving Corporation, the officers of
Merged Co immediately prior to the Effective Time shall be the officers of the
Surviving Corporation.
2.7 TAX FREE REORGANIZATION. The purpose of this Agreement is to grant
the shareholders of Merged Co the control of the Company by merging Merged Co
into the Company. In connection with the Merger, in exchange for all of their
issued and outstanding Merged Co Shares, the stockholders of Merged Co shall
receive newly issued shares of Company Stock.
ARTICLE 3
CLOSING
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 8
3.1 CLOSING. Upon the terms and subject to the conditions set forth
herein, the closing of the transactions contemplated herein (the "Closing")
shall be held at 10:00 o'clock A.M., at the offices of the Company on a date
which is mutually acceptable to the parties but not later than April 15, 1999
("Closing Date"), unless the parties hereto otherwise agree.
3.2 DELIVERIES AT CLOSING.
3.2.1 MERGED CO STOCK CERTIFICATES. The stockholders of
Merged Co (the "Merged Co Stockholders") shall, on the Closing Date, deliver to
the Company certificates evidencing all of the issued and outstanding shares of
Merged Co Common Stock ("Certificates"), duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank.
3.2.2 ISSUANCE OF COMPANY STOCK. At the Closing, upon
surrender of the Certificates duly endorsed by the Merged Co Stockholders, the
Company shall deliver to each Merged Co Stockholder his pro-rata portion of the
Total Merger Consideration in the form of certificates for Company Stock issued
in the name of the applicable Merged Co Stockholder with applicable restrictive
legends and stop transfer instructions. Except as otherwise provided in Section
2.3, until so surrendered, each such Certificate shall be deemed for all
purposes to evidence only the right to receive the Total Merger Consideration
payable in the form of Company Stock as set forth in Section 2.2.
3.2.3 PAYMENT TO NON-HOLDER. If the Total Merger
Consideration (or any portion thereof) is to be paid to a person other than the
person in whose name the certificates surrendered in exchange therefor are
registered, it shall be a condition to the payment of the Total Merger
Consideration that the Certificates so surrendered shall be properly endorsed or
accompanied by appropriate stock powers and otherwise be in proper form for
transfer, that such transfer otherwise be proper and that the person requesting
such transfer pay to Merged Co any transfer or other taxes payable by reason of
the foregoing or establish to the satisfaction of Merged Co that such taxes have
been paid or are not required to be paid.
3.2.4 LOST, STOLEN, OR DESTROYED CERTIFICATES. In the event
any Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and subject to such other conditions as the Board of
Directors of the Surviving Corporation may impose, Merged Co shall, or shall
cause the Surviving Corporation, as appropriate, to issue in exchange for such
lost, stolen or destroyed Certificate the Total Merger Consideration deliverable
in respect thereof. When authorizing such issue of the Total Merger
Consideration in exchange therefor, the Board of Directors of the Surviving
Corporation may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate to give
the Surviving Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Surviving Corporation with
respect to the Certificate alleged to have been lost, stolen or destroyed.
3.2.5 CERTIFICATES; OPINIONS. At the Closing, Merged Co and
the Company shall deliver the certificates, opinions of counsel, and other
documents and items described in Articles 7 and 8.
3.2.6 CONSENTS. The Company shall deliver all third party
consents required for a merger of Merged Co with and into the Company as
contemplated by this Agreement.
3.2.7 OTHER CLOSING TRANSACTIONS. At the Closing, each of
the parties shall take such other actions required hereby to be performed by it
prior to or on the Closing Date, including, without limitation, satisfying the
conditions set forth in Articles 7 and 8.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 9
The Company hereby represents and warrants to Merged Co and the
Stockholders that the following representations and warranties are, as of the
date hereof, and will be, as of the Closing Date, true and correct:
4.1 ORGANIZATION; CAPITALIZATION.
4.1.1 The Company is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has full
corporate power and authority to conduct its business as it is presently being
conducted and to own and lease its properties and assets. Except as set forth in
DISCLOSURE SCHEDULE 4.1.1, the Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is necessary under the applicable law as a result of the conduct
of its business or the ownership of its properties except where the failure to
be so qualified and in good standing would not have a Material Adverse Effect.
Each jurisdiction in which the Company is qualified to do business as a foreign
corporation is listed in DISCLOSURE SCHEDULE 4.1.1.
4.1.2 The Company has delivered to Merged Co copies of the
Organizational Documents of the Company, as currently in effect.
4.1.3 The capitalization of the Company as of the date
hereof and as of the Closing (including the identity of each shareholder and the
number of shares held by each) is set forth in DISCLOSURE SCHEDULE 4.1.3. All of
the Company's outstanding shares of capital stock are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights. Except as set
forth in DISCLOSURE SCHEDULE 4.1.3, there are no outstanding subscriptions,
calls, commitments, warrants or options for the purchase of shares of any
capital stock or other securities of the Company or any securities convertible
into or exchangeable for shares of capital stock or other securities issued by
the Company, or any other commitments of any kind for the issuance of additional
shares of capital stock or other securities issued by the Company.
4.1.4 The Company has not at any time had any Subsidiaries,
and the Company neither owns nor holds the right to acquire (directly or
indirectly) shares of capital stock in any other Person.
4.2 AUTHORIZATION. The Company has all necessary corporate power and
authority and has taken all corporate action necessary to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder, and no other proceedings on the part of the
Company are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and is a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditors' rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
4.3 CONSENTS AND APPROVALS. Other than as provided in DISCLOSURE
SCHEDULE 4.3, no notice to, declaration, filing or registration with, or
authorization, consent or approval of, or permit from, any domestic or foreign
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by the Company in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.4 TITLE TO ASSETS. DISCLOSURE SCHEDULE 4.4 identifies all real and
personal property with a book value or replacement cost in excess of $5,000
owned or leased by the Company. The Company owns free and clear of any
Encumbrances or, as set forth in DISCLOSURE SCHEDULE 4.4, leases or has rights
to use, the Assets set forth in DISCLOSURE SCHEDULE 4.4, except for (i) minor
liens or Encumbrances that in the aggregate are not substantial in amount, do
not materially detract from the value of the Assets subject thereto or interfere
with the present use thereof and have not arisen other than in the ordinary
course of business and (ii) Encumbrances specifically identified in DISCLOSURE
SCHEDULE 4.4. The Assets include all assets necessary for the conduct of the
business of the Company in the ordinary course consistent with past practice.
The Assets have been maintained in accordance with normal industry
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 10
practice, are in reasonable operating condition and repair (except for ordinary
wear and tear), and are sufficient for the operation of the business of the
Company as currently conducted.
4.5 FACILITIES. DISCLOSURE SCHEDULE 4.5 contains (i) a complete and
accurate list of all Owned Real Property, (ii) a complete and accurate list of
all Facilities, (iii) accurate and complete copies of preliminary title reports
covering all of the Owned Real Property, and (iv) a complete and accurate list
of all Facility Leases.
4.5.1 OWNED REAL PROPERTY. The Company has good and
marketable fee simple title to all Owned Real Property free and clear of all
Encumbrances (except as set forth in DISCLOSURE SCHEDULE 4.5.1), except for
minor liens which in the aggregate are not substantial in amount, do not
materially detract from the value or transferability of the property or assets
subject thereto or interfere with the present use thereof, and have not arisen
other than in the ordinary course of business. The Company enjoys peaceful and
undisturbed possession of all Owned Real Property.
4.5.2 ACTIONS. There are no pending or, to the best knowledge
of the Company, threatened condemnation proceedings or other Actions relating to
any Facility.
4.5.3 LEASES OR OTHER AGREEMENTS. Except for Facility
Leases listed in DISCLOSURE SCHEDULE 4.5, there are no leases, subleases,
licenses, occupancy agreements, options, rights, concessions or other agreements
or arrangements, written or oral, granting to any person the right to purchase,
use or occupy any Facility, or any real property of the Company or any portion
thereof or interest in any such Facility or real property.
4.5.4 FACILITY LEASES AND LEASE. With respect to each
Facility Lease, the Company has an unencumbered interest in the Leasehold
Estate. Except as set forth in DISCLOSURE SCHEDULE SECTION 4.5.4, (i) the
Company has in all material respects performed all the obligations required to
be performed by it through the date hereof with respect to all leased property
described in the Facility Leases (the "Leased Property"), and (ii) the Company
enjoys peaceful and undisturbed possession of all of the Leased Property.
4.5.5....UTILITIES. All Facilities are supplied with utilities
(including, without limitation, water, sewage disposal (or septic tank),
electricity, gas and telephone) and other services necessary for the operation
of such Facilities as currently operated and, to the knowledge of the Company,
there is no condition which could reasonably be expected to result in the
termination of the present access from any Facility to such utility services.
4.5.6 IMPROVEMENTS, FIXTURES AND EQUIPMENT. The
improvements constructed on the Facilities, including, without limitation, all
Leasehold Improvements, and all Fixtures and Equipment and other tangible assets
owned, leased or used by the Company at the Facilities are (i) insured to the
extent set forth in DISCLOSURE SCHEDULE 4.19, (ii) structurally sound with no
material defects, (iii) in good operating condition and repair, subject to
ordinary wear and tear, (iv) not in need of maintenance, repair or correction
except for ordinary or routine maintenance, correction, or repair, the cost of
which could not reasonably be expected to be material, (v) sufficient for the
operation of the business of the Company as presently conducted and (vi) in
conformity with all applicable Regulations.
4.5.7 NO SPECIAL ASSESSMENT. The Company has not received
notice of any special assessment relating to any Facility or any portion
thereof, and there is no pending or threatened special assessment.
4.6 CONTRACTS; NO DEFAULTS. Except for Contracts listed in DISCLOSURE
SCHEDULE 4.6, the Company is not a party to, or bound by, any Contract of any
kind to be performed after the Closing Date (i) pursuant to which it is
obligated to expend more than $25,000 in any twelve-month period and that is not
subject to cancellation on not more than 30 days' notice by the Company without
penalty or increased cost or (ii) with any Personnel or affiliates of the
Company or any stockholder owning beneficially 5% or more of the issued and
outstanding shares of Company Stock ("Principal Stockholder") or relatives of
any of the foregoing. There is no default by any party to any such Contract,
which default could have a
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 11
Material Adverse Effect. DISCLOSURE SCHEDULE 4.6 lists the following Contracts,
agreements and other written arrangements to which the Company is a party:
(a) any written arrangement (or group of related
written arrangements) for the lease of personal property providing for lease
payments in excess of
$10,000 per annum;
(b) any written arrangement (or group of related
written arrangements) for the purchase or sale of raw materials, commodities,
supplies, products or other property or for the furnishing or receipt of
services, including, without limitation, any customer or vendor contracts in
excess of $10,000 per annum;
(c) any written arrangement (or group of related
written arrangements) concerning a partnership or joint venture with any other
Person;
(d) any written arrangement (or group of related
written arrangements) under which it has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) indebtedness (including
capitalized lease obligations) involving more than $10,000 in principal amount
or under which it has imposed (or may impose) a security interest or lien on any
of its assets, tangible or intangible;
(e) any written arrangement (or group of related
written arrangements) concerning confidentiality or non-competition
arrangements;
(f) any written arrangement (or group of related
written arrangements) involving any Principal Stockholder or any Affiliate of
any Principle Stockholder;
(g) any Employee Plan and any written arrangement
with any of the Company's directors, officers, shareholders or employees in the
nature of a collective bargaining agreement, employment agreement or severance
agreement;
(h) any written arrangement for any capital
expenditure in excess of $10,000;
(i) any other written arrangement (or group of
related written arrangements) either involving aggregate payments of more than
$25,000 or not entered into in the ordinary course of business consistent with
past practice; and
(j) any oral contract, agreement or other arrangement
with respect to any of the matters referred to in the foregoing clauses (a)
through (i) and any proposal (whether oral or written) to enter into any
contract, agreement or other arrangement (other than sales presentations made to
customers in the ordinary course of business) with respect to any of the matters
referred to in the foregoing clauses (a) through (i).
The Company will deliver or make available to the Stockholders a
correct and complete copy of each Contract listed in DISCLOSURE SCHEDULE 4.6.
Except as set forth in DISCLOSURE SCHEDULE 4.6, with respect to each Contract
listed, (A) the Contract is legal, valid, binding, enforceable (except as such
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights generally and
(ii) the general principles of equity, regardless of whether asserted in a
proceeding in equity or at law) and in full force and effect; (B) no party is in
material breach or default, and no event has occurred which with notice or lapse
of time could constitute a material breach or default or permit termination,
modification or acceleration, under the Contract; and (C) no party has
repudiated any term of the Contract, and there are no renegotiations of,
attempts to renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to the Company under current or completed Contracts with
any Person, and no such Person has made written demand for such renegotiation.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 12
4.7 NO CONFLICT OR VIOLATION. Except as set forth in DISCLOSURE
SCHEDULE 4.7, neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby will result in (a)
a violation of or a conflict with any provision of the Organizational Documents
of the Company, (b) a breach of, or a default under, or the creation of any
right of any party to accelerate, terminate or cancel, any Contract, Permit,
authorization or concession to which the Company is a party or by which any of
the Assets are bound, (c) a violation by the Company of any law, statute, rule,
regulation, ordinance, code, order, judgment, writ, injunction, decree or award
applicable to the Company, or (d) an imposition of any material Encumbrance,
restriction or charge on the Company or any of the Assets. Except as set forth
in DISCLOSURE SCHEDULE 4.7, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority, or any other person or entity, is required to be made or obtained by
the Company in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby.
4.8 AUDITED FINANCIAL STATEMENTS. The Audited Financial Statements (a)
are in conformity with the Books and Records, (b) except as set forth in detail
in DISCLOSURE SCHEDULE 4.8, have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (c) fairly and
accurately present, in all material respects, the assets, liabilities (including
all reserves) and financial position of the Company as of the respective dates
thereof and the results of operations and changes in cash flows for the periods
then ended. The Audited Financial Statements of the Company have been examined
by the Company auditor whose unqualified report thereon is included with such
Audited Financial Statements.
4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
DISCLOSURE SCHEDULE 4.9, since the Audited Balance Sheet Date there has not been
any:
(a) change in the Company's financial condition or results of
operations, other than any such changes that have not yet had and could not
reasonably be expected to have a Material Adverse Effect;
(b) (i) except for normal periodic increases in the ordinary
course of business consistent with past practice, increase in the compensation
payable or to become payable by the Company to any of its officers, directors,
employees, former employees, or agents (collectively, "Personnel"), (ii) grant,
payment or accrual, contingent or otherwise, for or to the credit of any of the
Personnel with respect to any bonus, incentive compensation, service award or
other like benefit, (iii) adoption, creation or amendment of any Employee Plan,
(iv) employment agreement (written or verbal) to which the Company is a party or
(v) other change in employment terms for any of the Company's officers,
employees or agents;
(c) sale, lease, assignment or transfer of any of the Assets,
other than to Persons that are not Affiliates for fair consideration and in the
ordinary course of business consistent with past practice and not individually
or in the aggregate material to the Company;
(d) cancellation, compromise, waiver or release of any rights
or claims (or series of related rights or claims) either (i) involving an
Affiliate of the Company or any Principal Stockholder, (ii) involving more than
$10,000, or (iii) outside the ordinary course of business consistent with past
practice;
(e) amendment, cancellation or termination of any Contract, or
Permit (i) involving an Affiliate of the Company, (ii) involving payments in
excess of $25,000 in the aggregate, or (iii) that are otherwise material to the
Company;
(f) capital expenditure or the execution of any Lease,
Contract, or Permit (or series of related Contracts, Leases and Permits) or any
incurring of liability therefor (i) involving an Affiliate of the Company or any
Principal Stockholder, (ii) involving payments in excess of $25,000 in the
aggregate, or (iii) outside the ordinary course of business consistent with past
practice;
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 13
(g) failure to operate the business of the Company in the
ordinary course consistent with past practice and to use reasonable efforts to
preserve the business intact, to keep available to Merged Co the services of
Personnel, and to preserve for Merged Co the goodwill of the Company's
suppliers, customers, distributors and others having business relations with the
Company;
(h) change in GAAP or Tax accounting methods or practices by
the Company;
(i) mortgage, pledge or other encumbrance of any of the
Assets;
(j) declaration, setting aside for payment or payment of
any dividend or distribution in respect of any capital stock of the Company or
any redemption, purchase, or other acquisition of any of the Company's equity
securities or any bonus, fee or other payment, or any other transfer of the
Assets to or on behalf of any shareholder of the Company or any other Affiliate
of the Company, including, but not limited to, any payment of principal of or
interest on any debt owed to any of the foregoing or any payment of a bonus, fee
or other payment to any of the foregoing or the making of any loan to any of the
foregoing as an employee of the Company;
(k) issuance by the Company of, or commitment of the
Company to issue, any shares of stock or other equity securities or obligations
or securities convertible into or exchangeable for shares of stock or other
equity securities;
(l) indebtedness incurred by the Company for borrowed
money or any commitment to borrow money entered into by the Company or any loans
or guarantees made or agreed to be made by the Company;
(m) liabilities incurred (other than for borrowed money)
involving $10,000 or more except in the ordinary course of business and
consistent with past practice and not individually or in the aggregate material
to the Company, or any increase or change in any assumptions underlying, or
methods of calculating, any bad debt, contingency or other reserves;
(n) acceleration, termination, modification, cancellation
or threatened termination or cancellation of any Contract to which the Company
is a party or by which the Company is bound, outside the ordinary course of
business consistent with past practice or involving more than $10,000 in the
aggregate;
(o) capital investment in, any loan to, or any
acquisition of the securities or assets of any other Person (i) involving an
Affiliate of the Company or any shareholder of the Company, (ii) involving more
than $10,000 in the aggregate, or (iii) outside the ordinary course of business
consistent with past practice;
(p) grant of any license or sublicense of any rights under or
with respect to any Intellectual Property Rights;
(q) agreement (either oral or written) by the Company or
any Personnel to do any of the foregoing; or other event or condition of any
character that in any one case or in the aggregate has a Material Adverse
Effect, or any event or condition (other than events or conditions affecting the
economy generally) known to the Company that it is reasonable to expect could,
in any one case or in the aggregate, have a Material Adverse Effect in the
future.
4.10 NO UNDISCLOSED LIABILITIES. Except as set forth in DISCLOSURE
SCHEDULE 4.10, the Company has no liabilities or obligations (absolute, accrued,
contingent or otherwise) except (i) liabilities that are reflected and reserved
against on the Audited Balance Sheet that have not been paid or discharged since
the date thereof and (ii) liabilities incurred by the Company since the Audited
Balance Sheet Date in the ordinary course of business consistent with past
practice and in accordance with this Agreement (none of which relates to any
breach of contract, breach of warranty, tort, infringement or violation of law
or arose out of any complaint, action, suit or proceeding except those which
individually or in the aggregate could not have a Material Adverse Effect).
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 14
4.11 ACCOUNTS RECEIVABLE. The accounts receivable of the Company
reflected on the Audited Balance Sheet, and all accounts receivable of the
Company arising since the Audited Balance Sheet Date, represent bona fide claims
against debtors for sales made, services performed or other charges arising on
or before the date hereof, and all the goods delivered and services performed
that gave rise to said accounts were delivered or performed in accordance with
the applicable orders, Contracts or customer requirements. All accounts
receivable of the Company reflected on the Closing Balance Sheet shall be
subject to no defenses, counterclaims or rights of setoff and shall be fully
collectible in the ordinary course of business, without cost to Merged Co, in
collection efforts therefor, except to the extent of any reserve with respect
thereto set forth on the Closing Balance Sheet (excluding the notes thereto).
4.12 INVENTORIES. The values at which the Inventories are shown on the
Audited Balance Sheet have been determined in accordance with the normal
valuation policy of the Company as described in the Audited Financial
Statements, consistently applied, and in accordance with GAAP. The Inventories
(and items of inventory acquired or manufactured subsequent to the Audited
Balance Sheet Date) consist only of items of quality and quantity commercially
usable and salable in the ordinary course of business, except for any items of
obsolete material or material below standard quality, all of which have been
written down to realizable market value, or for which adequate reserves have
been provided on the Audited Balance Sheet. All inventories not written off have
been priced at the lower of cost or market on a first in, first out basis. The
current quantities of all Inventories are reasonable in the current
circumstances of the business of the Company.
4.13 INTELLECTUAL PROPERTY RIGHTS.
4.13.1 DISCLOSURE SCHEDULE 4.13.1 (i) contains detailed
information (including where applicable the federal registration number and the
date of registration or application for registration and the name in which
registration was applied for) concerning (x) all of the Company's registrations
of trademarks and of other marks, trade names or other trade rights, and all
pending applications for any such registrations and all of the Company's patents
and copyrights and all pending applications therefor, (y) all computer software
used by the Company in the conduct of its business ("Computer Software")
indicating whether such Computer Software is owned or licensed and, if licensed,
the material terms of such license, and (z) all other trademarks and other
marks, trade names and other trade rights and all other trade secrets, designs,
plans, specifications, and other intellectual property rights of any kind of the
Company, whether or not registered, (all of the items referred to in this clause
(i) being "Intellectual Property Rights") and (ii) identifies any intellectual
property rights that any third party owns and that the Company uses or proposes
to use in its business, and specifies whether such use is or will be pursuant to
license, sublicense, agreement or permission. The Company owns (or, as set forth
in DISCLOSURE SCHEDULE 4.13.1, possesses adequate and enforceable licenses or
other rights to use) all Intellectual Property Rights now used or proposed to be
used in its business and has taken all reasonably necessary or appropriate
action to protect the Intellectual Property Rights. Except as set forth in
DISCLOSURE SCHEDULE 4.13.1, no Person has a right to receive a royalty or
similar payment in respect of any Intellectual Property Rights pursuant to any
contractual arrangements entered into by the Company or otherwise. Except as set
forth in Disclosure Schedule 4.13, the Company has not received notice nor has
the Company any reason to believe that the use by the Company of the
Intellectual Property Rights is interfering with, infringing upon or otherwise
violating the rights of any third party in or to such Intellectual Property
Rights, and no proceedings have been instituted against or notices received by
the Company alleging that the Company's use or proposed use of any Intellectual
Property Rights infringes upon or otherwise violates any rights of a third party
in or to such Intellectual Property Rights, which infringement or violation
could have a Material Adverse Effect. The Intellectual Property Rights are all
those necessary for the operation of the business of the Company as it is
currently conducted. No employee of the Company has entered into any Contract
that restricts or limits in any way the scope or type of work in which the
employee may be engaged or requires the employee to transfer, assign, or
disclose information concerning his or her work to anyone other than the
Company.
4.13.2 The source codes for all Computer Software have been
placed in back-up files that are securely stored in a location other than the
Facility or Facilities where such Computer Software is used. All databases used
in the business of the Company are periodically (at least once every week)
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 15
backed-up, and such backed-up materials are moved to and securely stored at
locations other than the Facility or Facilities where such databases are used.
4.13.3 All Computer Software utilized by the Company
("Computer Software") shall support the use, entry or creation of dates on or
after January 1, 2000, so that when such a date is either processed, entered
into or is intended to be generated as a result of the operation of the Computer
Software, the Computer Software shall not (i) fail or produce incorrect date
results or (ii) cause any other programs to fail or to generate errors.
4.14 LITIGATION. Except as set forth in DISCLOSURE SCHEDULE 4.14, there
is no charge, complaint, action, order, writ, injunction, judgment or decree
outstanding or claim, suit, litigation, proceeding, labor dispute, arbitrable
action or investigation (collectively, "Actions") pending or, to the knowledge
of the Company, threatened or anticipated against, relating to or affecting (i)
the Company or the Assets or the operation of the business of the Company as
currently operated and as proposed to be operated, (ii) any Employee Plan or any
trust or other funding instrument, fiduciary or administrator thereof or (iii)
the transactions contemplated by this Agreement, before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, any of which could reasonably be
expected to result in the payment or a judgment in excess of $10,000 or could
reasonably be expected to have a Material Adverse Effect. The Company is not in
default with respect to any judgment, order, writ, injunction or decree of any
court or governmental agency, and there are no unsatisfied judgments against the
Company or the business of the Company. There is not a reasonable likelihood of
an adverse determination of any pending Actions that could, individually or in
the aggregate, reasonably be expected to result in the payment of a judgment in
excess of $10,000 or have a Material Adverse Effect. Except as set forth in
DISCLOSURE SCHEDULE 4.14, each Action pending or, to the knowledge of the
Company, threatened or that the Company has a reasonable basis to expect or
anticipate (whether or not disclosed in DISCLOSURE SCHEDULE 4.14), is covered by
insurance of reputable and solvent insurance companies, and each such applicable
Insurance Policy is described in DISCLOSURE SCHEDULE 4.19 and is in full force
and effect, and, except as set forth in DISCLOSURE SCHEDULE 4.14, the Company
has not received any notice or, to the knowledge of the Company, threat of
cancellation, limitation or noncoverage.
4.15 LABOR MATTERS. Except as set forth in DISCLOSURE SCHEDULE 4.15,
the Company has not been and is not a party to any labor agreement with respect
to its employees with any labor organization, group or association. The Company
has not experienced any attempt by organized labor or its representatives to
make the Company conform to demands of organized labor relating to its employees
or to enter into a binding agreement with organized labor that would cover its
employees. The Company is in material compliance with all applicable laws
respecting employment practices, terms and conditions of employment and wages
and hours and, to the best knowledge of the Company, is not and has not engaged
in any unfair labor practice. Except as set forth in DISCLOSURE SCHEDULE 4.15,
the Company is not liable for the payment of any compensation, damages, taxes,
fines, penalties, or other amounts, however designated, for failure to comply
with any of the foregoing legal requirements. There is no unfair labor practice
charge or complaint against the Company pending before the National Labor
Relations Board or any other governmental agency arising out of the Company's
activities, and the Company has no knowledge of any facts or information that
would give rise thereto; there is no labor strike or labor disturbance pending
or threatened against the Company nor is any grievance currently being asserted;
and since January 1, 1990, the Company has not experienced a work stoppage or
other labor difficulty.
4.16 COMPLIANCE WITH LAW; PERMITS. The Company and the conduct of the
business of the Company are in compliance with all applicable Regulations or
judgments, decisions or orders entered by any federal, state, local, or foreign
court relating to the Assets or the Company, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect. The Company
has not received any written notice to the effect that, or otherwise been
advised that, it is not in compliance with any Regulations, and the Company has
no reason to anticipate that any currently existing circumstances are likely to
result in violations of any such regulations which could, in any one case or in
the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company has all Permits, authorizations and approvals, all of which are
currently valid and in full force and effect, necessary to carry on its
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 16
business, which licenses, Permits, authorizations and approvals are set forth in
DISCLOSURE SCHEDULE 4.16.
4.17 TAXES. The Company has or will have filed all material federal,
state, local and foreign Tax Returns that are required to be filed by it on or
prior to the Closing Date (taking into account applicable extensions), all Taxes
shown as owing by the Company on all such Tax Returns have been fully paid or
properly accrued on the Company's financial statements other than such taxes as
are being contested in good faith, and all such Tax Returns are true and correct
in all material respects. The Tax Returns accurately reflect all liability for
Taxes of the Company for the periods covered thereby. Except as set forth in
DISCLOSURE SCHEDULE 4.17:
(a) all material Taxes that the Company is obligated to
withhold from amounts owing to any employee, creditor or third party have been
fully paid or properly accrued;
(b) the Company is not a party to any tax sharing agreements;
(c) there are no liens for Taxes upon the assets of the
Company which are not provided for on the Audited Balance Sheet except liens for
Taxes not yet due and payable and liens for taxes that are being contested in
good faith;
(d) there are no outstanding written requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any material Taxes or deficiencies against the
Company;
(e) no claim has ever been made by an authority in a
jurisdiction where the Company does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction;
(f) the Company does not have any liability for Taxes for
(or allocable to) any Tax year or period ending on or before the Closing Date
that has not been paid;
(g) the Company has not made, or is not (or is not a
party to an agreement under which it could be) obligated to make, any payments
that will not be deductible under Code Section 280G;
(h) the Company has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code Section 6662;
(i) the Company has never been a member of any Affiliated
group filing a consolidated federal income Tax Return and does not have any
liability for the Taxes of any Person under Reg. Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract or otherwise;
(j) there is no dispute or claim concerning any Tax
liability of the Company that has been made or raised by any authority in
writing or as to which any director or officer of the Company has knowledge;
(k) DISCLOSURE SCHEDULE 4.17 lists all federal, estate,
local, and foreign income Tax Returns filed by or with respect to the Company
for taxable periods ended on or after December 31, 1996, and identifies those
Tax Returns that have been or are currently being audited;
(l) the Company will not be liable for any Tax under Code
Section 1374 in connection with a deemed sale of its assets pursuant to an
election under Code Section 338(h)(10), and has not, in the past ten years,
acquired assets in a transaction in which its basis in the acquired assets was
determined, in whole or in part, by reference to the transferor's basis in such
assets (or any other property) or acquired stock of any corporation which is a
qualified subchapter S subsidiary;
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 17
(m) the Company has not made an election, or is not
otherwise required, to treat any Asset as owned by another person or as
tax-exempt bond financed property or tax exempt use property within the meaning
of Code Section 168 or under any comparable provision of state or local Tax law;
(n) the Company has not requested, agreed to, or is not
required to make any adjustment under Section 481(a) of the Code due to a change
in accounting method or for any other reason for any taxable year; and
(o) the Company has properly requested, received and
retained all necessary exemption certificates and other documentation supporting
any claimed exemption or waiver of Taxes on sales or other transactions as to
which the Company would have been obligated to collect or withhold Taxes.
4.18 SEVERANCE ARRANGEMENTS. Except as set forth in DISCLOSURE SCHEDULE
4.18, the Company has not entered into any severance or similar arrangement in
respect of any Personnel that will result in any obligation (absolute or
contingent) of Merged Co, the Company, the surviving Corporation or any other
Person to make any payment to any such Personnel following termination of
employment.
4.19 INSURANCE. DISCLOSURE SCHEDULE 4.19 contains a complete and
accurate list of all policies or binders of fire, liability, title, worker's
compensation and other forms of insurance (showing as to each policy or binder
the carrier, policy number, coverage limits, expiration dates, annual premiums
and a general description of the type of coverage provided) maintained by the
Company on its business, Assets or Personnel. Except as set forth in DISCLOSURE
SCHEDULE 4.19, all of such policies are sufficient for compliance with all
requirements of law and of all Contracts to which the Company is a party, except
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect. The Company is not in default under any of such policies or
binders, and the Company has not failed to give any notice or to present any
claim under any such policy or binder in a due and timely fashion. Such policies
and binders provide sufficient coverage, in the reasonable opinion of the
Company, for the risks insured against, are in full force and effect on the date
hereof and shall be kept in full force and effect by the Company through the
Closing Date. DISCLOSURE SCHEDULE 4.19 contains a complete and accurate list of
all open or unresolved claims made pursuant to any insurance policy maintained
by the Company. As of the Closing, the Company shall have made any and all
claims that, to the knowledge of the Company, it is entitled to make in
accordance with the terms of any insurance policy maintained by the Company.
4.20 PURCHASE COMMITMENTS AND OUTSTANDING BIDS. As of the date of this
Agreement, all Contracts or commitments for the purchase of Inventory by the
Company were made in the ordinary course of business consistent with past
practice. No outstanding purchase or outstanding lease commitment of the Company
presently is in excess of the normal, ordinary and usual requirements of its
business.
4.21 SUPPLIERS. DISCLOSURE SCHEDULE 4.21 contains a complete and
accurate list of the ten largest suppliers of the Company during the Company's
last fiscal year, showing the approximate total purchases by the Company from
each such supplier during each of the last two fiscal years. To the best
knowledge of the Company, since the Audited Balance Sheet Date, there has been
no adverse change in the business relationship with any supplier named in
DISCLOSURE SCHEDULE 4.21 and no threat or indication that any such change is
reasonably foreseeable. The Company has entered into an agreement with each of
its customers substantially in one or more of the forms set forth in DISCLOSURE
SCHEDULE 4.21.
4.22 BANK ACCOUNTS. DISCLOSURE SCHEDULE 4.22 contains a true and
correct list of the names of each bank, savings and loan, or other financial
institution in which the Company has an account, including cash contribution
accounts, or safe deposit boxes, and the names of all Persons authorized to draw
thereon or with access thereto.
4.23 ENVIRONMENTAL MATTERS.
4.23.1 Except as set forth in DISCLOSURE SCHEDULE 4.23.1,
the Company is, and at all times has been, in material compliance with all
Environmental Laws (as defined below).
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 18
4.23.2 Except as set forth in DISCLOSURE SCHEDULE 4.23.2,
there is no pending or, to the best knowledge of the Company, after due inquiry,
potential Environmental Claim (as defined below); nor has the Company received
any notification or knowledge of alleged, actual or potential responsibility
for, or any inquiry or investigation regarding, (i) any disposal, release, or
threatened release at any location of any Hazardous Substance (as defined below)
generated or transported by the Company or (ii) any alleged violation of or
non-compliance with any Environmental Laws.
4.23.3 Except as set forth in DISCLOSURE SCHEDULE 4.23.3,
(i) no underground tank or other underground storage receptacle for Hazardous
Substances is currently located on the Company's properties and there have been
no releases of any Hazardous Substances from any underground tank or related
piping at any time; and (ii) there have been no releases (i.e., any past or
present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing, or dumping) of Hazardous
Substances by the Company on, upon, or into any real property owned, operated or
occupied at any time by the Company. In addition, to the best knowledge of the
Company, after due inquiry, there have been no such releases by any other
parties and no such releases on, upon, or into any real property in the vicinity
of any real property owned, operated or occupied at any time by the Company
that, through soil or ground water contamination, may have come to be located on
any real property owned, operated or occupied at any time by the Company.
4.23.4 Except as set forth in DISCLOSURE SCHEDULE 4.23.4,
there are no PCBs or asbestos located at or on any real property owned, operated
or occupied at any time by the Company.
4.23.5 Except as set forth in DISCLOSURE SCHEDULE 4.23.5, no
environmental lien has attached to any property to be transferred to Merged Co
under this Agreement.
4.23.6 True, complete, and correct copies of all
Environmental Claims, environmental permits, waste disposal manifests,
environmental sampling records and any environmental reports, audits, or
assessments which have been conducted generally or received within the past
three years at or relating to any Facility or any other real property owned,
operated or occupied at any time by the Company which reports, audits or
assessments are in the possession, custody, or control of the Company, have been
delivered to the Stockholders and a list of all such reports is included in
DISCLOSURE SCHEDULE 4.23.6.
4.23.7 Except as set forth in DISCLOSURE SCHEDULE 4.23.7,
the Company is not a party or otherwise bound to any contract (excluding leases
and insurance policies) under which the Company is obligated by or entitled to
the benefits of any representation, warranty, indemnification, covenant,
restriction or other undertaking concerning costs or liabilities associated with
Environmental Laws.
4.23.8 DEFINITIONS.
(i) For purposes of this Agreement, "Environmental
Laws" shall mean all federal, state, district, local, and foreign laws, all
rules or regulations promulgated thereunder, and all orders, consent orders,
judgments, notices, permits, or demand letters issued, promulgated, or entered
pursuant thereto, relating to pollution or protection of the environment
(including, without limitation, ambient air, surface water, ground water, land
surface, or subsurface strata), including, without limitation, (i) laws relating
to emissions, discharges, releases, or threatened releases of pollutants,
Contaminants, chemicals, materials, wastes, or other substances into the
environment and (ii) laws relating to the identification, generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
recovery, transport, or other handling of pollutants, contaminants, chemicals,
industrial materials, wastes, or other substances. Environmental Laws shall
include, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Toxic Substances Control
Act, as amended, the Hazardous Materials Transportation Act, as amended, the
Resource Conservation and Recovery Act, as amended, the Clean Water Act, as
amended, the Safe Drinking Water Act, as amended, the Clean Air Act, as amended,
the Atomic Energy Act of 1954, as amended, the Occupational Safety and Health
Act, as amended, and all analogous laws promulgated or issued by
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 19
any state or other governmental authority, including state laws imposing notice
or remediation requirements in connection with the transfer of industrial
establishments.
(ii) For purposes of this Agreement, "Environmental
Claims" shall mean all accusations, allegations, governmental investigations or
requests for information, notices of potential responsibility for response
costs, notice of violations, liens, claims, demands, suits, or causes of action
against the Company for any damage, including, without limitation, personal
injury, property damage (including any depreciation of property values), lost
use of property, or consequential damages, arising directly or indirectly out of
Environmental Conditions or Environmental Laws. By way of example only,
Environmental Claims include (A) violations of or obligations under any contract
between the Company and any other person, (B) actual or threatened damages to
natural resources, (C) claims for nuisance or its statutory equivalent, (D)
claims for the recovery of response costs, or administrative or judicial orders
directing the performance of/ investigations, response or remedial actions under
any Environmental Laws, (E) a requirement to implement "corrective action"
pursuant to any order or permit issued pursuant to the Resource Conservation and
Recovery Act, as amended, or similar provisions of applicable state law, (F)
claims for restitution, contribution, or indemnity, (G) fines, penalties, or
liens of any kind against property, (H) claims for injunctive relief or other
orders or notices of violation from federal, state, or local agencies or courts,
and (1) with regard to any present or former employees, claims relating to
exposure to or injury from Environmental Conditions.
(iii) For purposes of this Agreement, "Environmental
Conditions" shall mean the state of the environment, including natural resources
(e.g., flora and fauna), soil, surface water, ground water, any present or
potential drinking water supply, subsurface strata, or ambient air, relating to
or arising out of the use, handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, pouring, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, or threatened
release of Hazardous Substances. With respect to Environmental Claims by third
parties, Environmental Conditions also include the exposure of persons to
Hazardous Substances at the work place or the exposure of persons or property to
Hazardous Substances migrating from or otherwise emanating from or located on
property owned or occupied by the Company.
(iv) For purposes of this Agreement, "Hazardous
Substances" shall mean all pollutants, contaminants, chemicals, wastes, and any
other carcinogenic, ignitable, corrosive, reactive, toxic, or otherwise
hazardous substances or materials (whether solids, liquids or gases), including,
but not limited to, any substances, materials, or wastes subject to regulation,
control, or remediation under Environmental Laws. By way of example only, the
term Hazardous Substances includes petroleum, urea formaldehyde, flammable,
explosive, and radioactive materials, PCBs, pesticides, herbicides, asbestos,
sludge, slag, acids, metals, solvents, or waste waters.
4.24 EMPLOYEE BENEFIT PLANS.
4.24.1 DELIVERY OF COPIES OF RELEVANT INFORMATION.
DISCLOSURE SCHEDULE 4.24.1 contains a complete list of Employee Plans that cover
or, after December 31, 1992, have covered employees of the Company (with respect
to their relationship with the Company). True and complete copies of each of the
following documents have been delivered by the Company to Merged Co: (i) each
Welfare Plan, Pension Plan and Multi-employer Plan (and, if applicable, related
trust agreements) which covers or, after December 31, 1992, has covered
employees of the Company (with respect to their relationship with the Company)
and all amendments thereto, all written interpretations thereof and written
descriptions thereof which have been distributed generally to the Company's
employees and all annuity contracts or other funding instruments, (ii) each
Benefit Arrangement which covers or, after December 31, 1992, has covered
employees of the Company (with respect to their relationship with the Company)
including written interpretations thereof and written descriptions thereof which
have been distributed generally to the Company's employees (including
descriptions of the number of employees currently covered thereby) and a
complete description of any such Benefit Arrangement which is not in writing,
(iii) the most recent determination letter issued by the Internal Revenue
Service on each Pension Plan which is intended to be tax-qualified pursuant to
Section 401 of the Code, (iv) for the three most recent plan years, Annual
Reports on Form 5500 Series required to be filed with any governmental agency
for each Pension Plan which covers or, after December 31, 1992, has covered
employees of the Company (with
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 20
respect to their relationship with the Company) (v) a description of complete
age, salary, service and related data as of the last day of the last plan year
for employees and former employees of the Company, and (vi) a description
setting forth the amount of any liability of the Company as of the Closing Date
for payments more than thirty days past due with respect to each Welfare Plan
which covers or, after December 31, 1992, has covered employees or former
employees of the Company.
4.24.2 REPRESENTATIONS. Except as set forth in DISCLOSURE
SCHEDULE 4.24.2, the Company represents as follows:
(i) IN GENERAL. Each Employee Plan, each related
trust agreement, annuity contract or other funding instrument which covers or,
after December 31, 1992, has covered employees or former employees of the
Company (with respect to their relationship with the Company) presently complies
and has been maintained in compliance with its terms and, both as to form and in
operation, with the requirements prescribed by any and all statutes, orders,
rules and regulations which are applicable to such plans, including, but not
limited to, ERISA and the Code.
(ii) PENSION PLANS. Each Pension Plan and each
related trust agreement, annuity contract or other funding instrument which
covers or, after December 31, 1992, has covered employees or former employees of
the Company (with respect to their relationship with the Company) is qualified
and tax-exempt under the provisions of Code Sections 401(a) (or 403(a), as
appropriate) and 501(a) and has been so qualified during the period from its
adoption to date. No Pension Plan is subject to Sections 412 of the Code or 302
of ERISA.
(iii) MULTI-EMPLOYER PLANS. There are no
Multi-employer Plans.
(iv) WELFARE PLANS.
(1) None of the Company, any ERISA Affiliate
or any Welfare Plan has any present or future obligation to make any payment to
or with respect to any present or former employee of the Company or any ERISA
Affiliate pursuant to any retiree medical benefit plan, or other retiree Welfare
Plan, and no condition exists which would prevent the Company from amending or
terminating any such benefit plan or Welfare Plan except as may be required by
Part 6 of Title I of ERISA.
(2) Each Welfare Plan which covers or has
covered employees or former employees of the Company and which is a "group
health plan," as defined in Section 607(l) of ERISA, has been operated in
compliance with the provisions of Part 6 of Title I of ERISA and Section 4980B
of the Code and Proposed Regulations under Section 162 of the Code at all times.
(v) EMPLOYMENT. Except as set forth on DISCLOSURE
SCHEDULE 4.24.2, and except as provided by law, the employment of all persons
presently employed or retained by the Company is terminable at will.
(vi) UNRELATED BUSINESS TAXABLE INCOME. No Employee
Plan (or trust or other funding vehicle pursuant thereto) is subject to any Tax
under Code Section 511.
(vii) DEDUCTIBILITY OF PAYMENTS. There is no
contract, agreement, plan or arrangement covering any employee or former
employee of the Company (with respect to their relationship with the Company) or
any other person that, individually or collectively, has provided or may provide
for the payment by the Company of any amount (1) that is not deductible under
Section 162(a)(1), 162(m) or 404 of the Code or (2) that is an "excess parachute
payment" pursuant to Section 280G of the Code.
(viii) FOREIGN SUBSIDIARIES AND EMPLOYEES. There are
no Subsidiaries organized under the laws of or doing business in any country
other than the United States, and none of the Employee Plans which covers any
employee or former employee of the Company covers any person who is employed in
any country other than the United States.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 21
(ix) FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS.
None of the Company or any plan fiduciary of any Welfare Plan or Pension Plan
which covers or has covered employees or former employees of the Company or any
ERISA Affiliate has engaged in any transaction in violation of Sections 404 or
406 of ERISA or any "prohibited transaction," as defined in Section 4975(c)(1)
of the Code, for which no exemption exists under Section 408 of ERISA or Section
4975(c)(2) or (d) of the Code.
(x) LITIGATION. None of the Company, any ERISA
Affiliate, or any Employee Plan that covers or has covered employees or former
employees of the Company (with respect to their relationship with the Company)
is a party to any litigation relating to or seeking benefits under any Employee
Plan.
(xi) NO AMENDMENTS. Neither the Company nor any ERISA
Affiliate has any announced plan or legally binding commitment to create any
additional Employee Plans which are intended to cover employees or former
employees of the Company (with respect to their relationship with the Company)
or to amend or modify any existing Employee Plan which covers or has covered
employees or former employees of the Company (with respect to their relationship
with the Company).
(xii) COAL INDUSTRY RETIREE HEALTH BENEFITS. Neither
the Company nor any ERISA Affiliate has any liability, directly or indirectly,
contingent or otherwise, under Code Sections 9701 through 9722 or with respect
to the "United Mine Workers of America Combined Benefit Fund", established under
Code Section 9702, any "individual employer plan", described in Code Section
9711, or the "1992 UMWA Benefit Plan", established under Code Section 9712.
(xiii) INSURANCE CONTRACTS. No Employee Plan holds as
an asset any interest in any annuity contract, guaranteed investment contract or
any other investment or insurance contract issued by an insurance company that
is the subject of bankruptcy, conservatorship or rehabilitation proceedings.
(xiv) NO OTHER MATERIAL LIABILITIES. No event has
occurred in connection with which the Company or any ERISA Affiliate or any
Employee Plan, directly or indirectly, could be subject to any material
liability (1) under any statute, regulation or governmental order relating to
any Employee Plan or (2) pursuant to any obligation of the Company to indemnify
any person against liability incurred under, any such statute, regulation or
order as they relate to the Employee Plans.
4.25 NO BROKERS. The Company does not and will not have any obligation
to pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.
4.26 NO OTHER AGREEMENTS TO SELL THE ASSETS OR CAPITAL STOCK OF THE
COMPANY. The Company has no legal obligation, absolute or contingent, to any
other Person to sell or effect a sale of the capital stock of the Company
(except as set forth in DISCLOSURE SCHEDULE 4.1) or to effect any merger,
consolidation or the reorganization of the Company or to enter into any
agreement or cause the entering into of an agreement with respect thereto, other
than as set forth herein.
4.27 BOOKS AND RECORDS. The Company has made and kept (and given Merged
Co access to) Books and Records and accounts, which, in reasonable detail,
accurately and fairly reflect the activities of the Company. The Company has not
engaged in any material transaction, maintained any bank account or used any
corporate funds in connection with the business of the Company except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained books and records of the Company.
4.28 AMERICANS WITH DISABILITIES ACT COMPLIANCE. The Facilities have
been constructed and maintained in accordance and full compliance with the ADA.
The Company has not received any notice to the effect that, or otherwise been
advised that, the Facilities are not in compliance with the ADA, and the Company
has no reason to anticipate that any existing circumstances at any of the
Facilities are likely to result in violation of the ADA. No representation or
warranty is being made herein regarding the
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 22
subject matter hereof which may arise or otherwise occur as a result of any
alterations, changes or additions of any nature made to any of the Facilities by
Merged Co.
4.29 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties by the Company in this Agreement, nor any document, exhibit,
statement, certificate or schedule furnished or to be furnished to Merged Co or
the Stockholders pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary to make the
statements or facts contained therein not misleading.
4.30 INVESTMENTS. The Company does not own or have the right to
acquire, directly or indirectly, any interest or investment (whether equity or
debt) in any corporation, partnership, joint venture, business, trust or entity,
other than (i) non-controlling investments made in the ordinary course of
business and corporate partnering, development, cooperative marketing and
similar undertakings and arrangements entered into in the ordinary course of
business, and (ii) other investments of less than $10,000 in the aggregate.
4.31 INSIDER INTERESTS. DISCLOSURE SCHEDULE 4.31 sets forth all
material contracts, agreements with and other obligations to officers,
directors, employees or shareholders of the Company and their affiliates. Except
as set forth in DISCLOSURE SCHEDULE 4.31, no officer, director or shareholder of
the Company, and no entity controlled by any such officer, director or
shareholder, and no relative or spouse who resides with any such officer,
director or shareholder (i) owns, directly or indirectly, any material interest
in any Person that is or is engaged in business, other than on an arm's-length
basis, as a competitor, lessor, lessee, customer or supplier of the Company or
(ii) owns, in whole or in part, any tangible or intangible property that the
Company uses in the conduct of its business.
4.32 TAX FREE REORGANIZATION.
4.32.1 No part of the consideration to be distributed by
Company to any Stockholder is being distributed to any such Stockholder pursuant
to this Agreement as a creditor, employee, or in any capacity other than that of
a stockholder of Merged Co.
4.32.2 The Company has been engaged in the active conduct of
a trade or business during the five-year period ending on the date of
distribution of shares of the Company to the Stockholders. Each such trade or
business has and continues to involve entrepreneurial endeavors of such a nature
and to such an extent as to quantitatively distinguish its operations from mere
investments. All such trades or businesses during said period have involved
active and substantial managerial and operational activities. Each such business
activity has been the activity of the Company itself (through its officers and
employees) and not the activity of independent contractors.
4.32.3 With respect to the active businesses engaged in by
the Company, which are discussed in Section 4.32.2 above, each such business has
been continuously conducted by the Company for the five-year period ending on
the date of distribution of the stock of the Company. The Company has not
acquired any of the businesses discussed hereunder at any time during that
five-year period in a transaction in which gain or loss was recognized in whole
or part.
4.32.4 Following the merger contemplated by this Agreement,
the Company will continue the active conduct of its businesses.
4.32.5 Neither Merged Co nor the Company will assume any
liabilities of any Stockholder incident to the exchanges of stock contemplated
by this Agreement, and no indebtedness of the Company will be assumed by any
Stockholder incident to the exchanges contemplated by this Agreement.
4.32.6 No indebtedness exists or will exist the Company and
any Stockholder.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 23
4.32.7 The terms of the exchange of Company Stock for their
respective shares of capital stock in Merged Co pursuant to this Agreement have
been determined by arm's-length negotiation among the Stockholders and the
Company and for valid business purposes.
4.32.8 There is no plan or intention to liquidate the
Surviving Corporation or to merge the Surviving Corporation with any other
company or to sell or otherwise dispose of the assets of the Surviving
Corporation subsequent to the transaction.
4.32.9 There is no present intention of any Stockholder to
sell, exchange, transfer by gift, or otherwise dispose of any of its stock or
securities of the Company subsequent to the closing of the transaction
contemplated by this Agreement.
4.32.10 Payment made in connection with any and all continuing
transactions between the Company or Merged Co and any Stockholder will be for
fair market value based on terms and conditions arrived at by such Stockholder's
bargaining at arm's length.
4.32.11 None of the stock or securities to be issued by the
Company pursuant to this Agreement is to be issued as compensation, royalties,
or any other consideration.
4.32.12 The Company is not insolvent.
4.32.13 None of the stock or securities of the Company to be
received by any Stockholder is attributable to interest accrued on securities
held by any Stockholder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGED CO
Merged Co hereby represents and warrants to the Company as follows:
5.1 ORGANIZATION OF MERGED CO . Merged Co is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Florida.
5.2 AUTHORIZATION. Merged Co has all necessary corporate power and
authority and has taken all corporate action necessary to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder, and no other proceedings on the part of
Merged Co are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Merged Co and is a legal, valid and binding obligation of Merged Co, enforceable
against it in accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditors' rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
5.3 CAPITALIZATION. Each Stockholder owns of record the outstanding
shares of capital stock as of the date hereof or as of the Closing Date,
respectively, of Merged Co, as set forth opposite such Stockholder's name in
DISCLOSURE SCHEDULE 4.1.3, free and clear of all Encumbrances, with full right,
power and authority to transfer such shares to the Company. Except as set forth
in DISCLOSURE SCHEDULE 4.1.3, there are no outstanding subscriptions, calls,
commitments, warrants or options for the purchase of shares of any capital stock
or other securities of Merged Co or any securities convertible into or
exchangeable for shares of capital stock or other securities issued by Merged
Co, or any other commitments of any kind for the issuance of additional shares
of capital stock or other securities issued by Merged Co. Upon delivery to the
Company, the capital stock of Merged Co will be free and clear of all
Encumbrances and shall be duly authorized, validly issued, fully paid and
non-assessable. At the Closing, the Stockholders will transfer good and
marketable title to the capital stock of Merged Co to the Company.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 24
5.4 NO CONFLICT OR VIOLATION. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
result in (a) a violation of or a conflict with any provision of the Certificate
or Articles of Incorporation or bylaws of Merged Co, (b) a breach of, or a
default under, any term or provision of any contract, agreement, indebtedness,
lease, commitment, license, franchise, permit, authorization or concession to
which Merged Co or a Stockholder is a party, which breach or default could
reasonably be expected to have a Material Adverse Effect on the business or
financial condition of Merged Co or its ability to consummate the transactions
contemplated hereby or (c) a violation by Merged Co or a Stockholder of any
statute, rule, regulation, ordinance, code, order, judgment, writ, injunction,
decree or award, which violation could reasonably be expected to have a Material
Adverse Effect on the business or financial condition of Merged Co, or its
ability to consummate the transactions contemplated hereby.
5.5 CONSENTS AND APPROVALS. Except as set forth on DISCLOSURE SCHEDULE
5.4, no notice to, declaration, filing or registration with, or authorization,
consent or approval of, or permit from, any domestic or foreign governmental or
regulatory body or authority, or any other person or entity, is required to be
made or obtained by Merged Co or any Stockholder in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.
5.6 NO BROKERS. Any obligation to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby is solely the obligation of Merged Co. Any such fee payable by any
Stockholder is solely the obligation of such Stockholder.
5.7 SECURITIES ACT OF 1933 Each Stockholder is acquiring shares of
Company Stock for investment purposes, solely for his or her own account and not
as a nominee or agent for any other person and not with a view to, or for offer
or sale in connection with, any distribution thereof within the meaning of the
Securities Act of 1933, as amended (the "Act"), that would be in violation of
the securities laws of the United States of America or any state thereof,
without prejudice, however, to such Stockholder's right at all times to sell or
otherwise dispose of all or any part of the Company Stock pursuant to an
effective registration statement under the Act or pursuant to an exemption from
the registration requirements of the Act.
ARTICLE 6
COVENANTS OF THE STOCKHOLDERS, THE COMPANY, AND MERGED CO
The Company and Merged Co covenant and agree with each other as follows:
6.1 FURTHER ASSURANCES:
6.1.1 Upon the terms and subject to the conditions contained
herein, the parties agree, both before and after the Closing, (i) to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, all actions necessary to satisfy the conditions to Closing
set forth in Articles 7 and 8 hereof, (ii) to execute any documents, instruments
or conveyances of any kind which may be reasonably necessary or advisable to
carry out any of the transactions contemplated hereunder, and (iii) to cooperate
with each other in connection with the foregoing. Without limiting the
foregoing, the parties agree to use their respective best efforts (i) to obtain
all necessary waivers, consents and approvals from other parties to the
Contracts and Leases; PROVIDED, HOWEVER, that the Company shall not be required
to make any payments, commence litigation or agree to modifications of the terms
thereof in order to obtain any such waivers, consents or approvals without the
written consent of Merged Co, (ii) to obtain all necessary Permits as are
required to be obtained under any Regulations, (iii) to defend all Actions
challenging this Agreement or the consummation of the transactions contemplated
hereby, (iv) to lift or rescind any injunction or restraining order or other
court order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby, (v) to give all notices to, and make all
registrations and filings with third parties, including, without limitations,
submissions of information requested by
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 25
governmental authorities and (vi) to fulfill all conditions to this Agreement.
The Company will promptly commence all actions required under this Section 6. 1.
6.1.2 Merged Co and the Company agree to furnish or cause
to be furnished to each other, upon request, as promptly as practicable, such
information and assistance (including access to books and records) relating to
the Company as are reasonably necessary to respond to notices or audit requests,
for the preparation of any return with respect to Taxes or claims for refund,
and for the prosecution or defense of any claim, suit or proceeding relating to
any proposed adjustment with respect to Taxes.
6.2 CONDUCT OF BUSINESS. From the date hereof through the Closing,
except as contemplated by this Agreement, or as consented to by the other party
in writing, each of the Company and Merged Co (each sometimes referred to in
this section 6.2 as the "Entity") shall be operated in the ordinary course and
in accordance with past practice and will not take any action inconsistent with
this Agreement or with the consummation of the Closing. Without limiting the
generality of the foregoing, Neither the Company nor Merged Co shall, except as
specifically contemplated by this Agreement, as set forth in DISCLOSURE SCHEDULE
6.2, or as consented to in writing, by Merged Co and the Stockholders in case of
the Company, and by the Company in the case of Merged Co:
(a) change or amend the Organizational Documents of the
Entity;
(b) enter into, extend, materially modify, terminate or
renew any Lease or any Contract, except modifications, extensions or renewals of
Contracts in the ordinary course of business;
(c) sell, assign, transfer, convey, lease, mortgage,
pledge or otherwise dispose of or encumber any of the Assets or any interests
therein except in the ordinary course of business and, without limiting the
generality of the foregoing, the Entity will maintain, dispose of, and sell
Inventory consistent with past practices;
(d) incur any liability for indebtedness for borrowed
money, guarantee the obligations of others, indemnify or agree to indemnify
others or, except in the ordinary course of business, incur any other liability;
(e) (i) take any action with respect to the grant of any
bonus, severance or termination pay (otherwise than pursuant to policies or
agreements of the Entity in effect on the date hereof that are described on the
Disclosure Schedules) or with respect to any increase of benefits payable under
its severance or termination pay policies or agreements in effect on the date
hereof or increase in any manner the compensation or fringe benefits of any
employee of the Entity or pay, any benefit not required by any existing Employee
Plan or policy, other than as set forth in DISCLOSURE SCHEDULE 6.2;
(ii) make any change in the key management structure
of the Entity, including, without limitation, the hiring of additional officers
or the termination of existing officers;
(iii) adopt, enter into or amend any Employee Plan,
agreement (including, without limitation, any collective bargaining or
employment agreement), trust, fund or other arrangement for the benefit or
welfare of any employee, except for any such amendment as may be required to
comply with applicable regulations; or
(iv) fail to maintain all Employee Plans in
accordance with applicable Regulations;
(f) acquire by merger or consolidation with, or merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any material assets or business of, any corporation, partnership,
association or other business organization or division thereof or acquire any
Subsidiary;
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 26
(g) willingly allow or permit to be done any act by which any
of the Insurance Policies may be suspended, impaired or canceled;
(h) enter into, renew, modify or revise any agreement or
transaction relating to the Entity with any of its or their Affiliates;
(i) fail to maintain the Assets in substantially their current
state of repair, excepting normal wear and tear, or fail to replace (consistent
with the Entity's past practice) inoperable, worn-out or obsolete or destroyed
Assets;
(j) make any loans or advances relating to the Entity to
any partnership, firm, individual, or corporation, except for expenses incurred
in the ordinary course of business consistent with past practice;
(k) fail to comply in all material respects with all
Regulations applicable to the Entity and the Assets;
(l) change any of the GAAP or Tax accounting methods or
practices of the Entity as historically applied or make any new elections or
change any existing elections with respect to Taxes;
(m) intentionally do any other act which would cause any
representation or warranty of the Entity in this Agreement to be or become
untrue, or any covenant in this Agreement to be breached, in any material
respect;
(n) fail to use reasonable efforts consistent with past
business practice to (i) maintain the Entity so that the services of its
officers, employees, consultants and agents will remain available to it on and
after the Closing Date, (ii) maintain existing relationships with suppliers,
customers and others having business dealings with the Entity and (iii)
otherwise preserve the goodwill of the business of the Entity so that such
relationships and goodwill will be preserved on and after the Closing Date;
(o) enter into any agreement, or otherwise become obligated,
to do any action prohibited hereunder;
(p) except as set forth in DISCLOSURE SCHEDULE 6.2, declare,
set aside for payment, or pay any dividend or distribution in respect of any
capital stock of the Entity; redeem, purchase or otherwise acquire any of the
Entity's equity securities; pay any bonus, fee or other payment; or otherwise
transfer any of the Assets to or on behalf of any stockholder of the Entity or
any Affiliate of the Entity, including, without limitation, any payment of
principal of or interest on any debt owed to any of the foregoing or any payment
of a bonus, fee or other payment to any of the foregoing as an employee of the
Entity; or
(q) fail to comply with all applicable filing, payment,
withholding, collection and record retention obligations under all applicable
federal, state, local or foreign Tax laws.
6.3 RECORDS. Each Entity shall have prepared and made available (or, in
the case of a portion of a period ending on the Closing Date, will prepare and
make available before the Closing) to the other Entity all of such Entity's
books and working papers that clearly demonstrate the income and activities of
such Entity for any period or any portion of a period ending on or prior to the
Closing Date.
6.4 ACCESS TO CONTRACTS, BOOKS AND RECORDS. The Company shall allow the
Stockholders and Merged Co, and Merged Co shall allow the Company, and each of
their respective counsel, accountants, and other representatives, during regular
business hours to make such inspection of the Assets and to inspect and make
copies of Contracts, Books and Records or other information requested by the
other Entity and related to the operation of the business of the Entity,
including historical financial information concerning the business of the
Entity. Each Entity shall furnish to the other Entity promptly upon request (i)
all such additional documents and information with respect to the affairs of the
Entity
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 27
relating to its business or (ii) access to Personnel and to the Entity's
accountants and counsel as the other Entity or its counsel or accountants may
from time to time reasonably request and shall instruct such Personnel,
accountants and counsel to cooperate with the other Entity, and to provide such
information as the other Entity and such representatives may request, in all
cases only to the extent the foregoing relate to the subject matter of this
Agreement.
6.5 ENVIRONMENTAL. Prior to the Closing, each Entity shall have the
right, at its sole cost and expense, to (i) conduct tests of the soil surface or
subsurface waters and air quality at, in, on, beneath or about the Leased
Property and the Owned Real Property of the other Entity and to conduct such
other procedures as may be recommended by an environmental consultant engaged by
the requesting Entity based on its reasonable professional judgment, in a manner
consistent with good engineering practice, (ii) inspect records, reports,
permits, applications, monitoring results, studies, correspondence data and any
other information or documents relevant to environmental conditions or
environmental noncompliance; and (iii) inspect all buildings and equipment at
the properties of the other Entity, including, without limitation, the visual
inspection of the physical plant for asbestos-containing construction materials;
PROVIDED, HOWEVER, that in each case, such tests and inspections shall be
conducted only (x) during regular business hours and (y) in a matter that will
not unduly interfere with the operation of the business of the other Entity
and/or the use of, access to or egress from the properties of the other Entity.
6.6 FINANCIAL STATEMENTS. Each Entity shall provide the other Entity
with an unaudited balance sheet and the related statements of income,
stockholders' equity and cash flows for each calendar month between the date of
this Agreement and the Closing Date within 30 days after the end of each month.
Such financial statements shall (i) be in accordance with the books and records
of the Entity and (ii) have been prepared in accordance with GAAP consistently
applied throughout the periods indicated and present fairly, as of the
respective dates thereof or the periods covered thereby, as applicable, the
financial position, stockholders' equity, cash flows and results of operations
of the Entity.
6.7 NOTIFICATION OF CERTAIN MATTERS. Between the date of this Agreement
and the Closing, each Entity shall give prompt notice to the other Entity of (i)
the occurrence, or failure to occur, of any event which occurrence or failure
would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect any time from the
date hereof to the Closing Date and (ii) any material failure of the Entity or
any Affiliate, officer, director, employee, agent or stockholder of the Entity
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; PROVIDED, HOWEVER, that such disclosure shall
not be deemed to cure any breach of a representation, warranty, covenant or
agreement or to satisfy any condition. During the same period, the Entity shall
promptly notify the other Entity of the occurrence of any breach of the Entity
of any covenant in this Article 6 or of the occurrence of any event that may
make the satisfaction of the conditions in Article 8 impossible or unlikely.
Should any such fact or condition require any change in any Disclosure Schedule
if the Disclosure Schedule were dated the date of the occurrence or discovery of
any such fact or condition, the Entity making such change will promptly deliver
to the other Entity a supplement to the Disclosure Schedule specifying such
change; PROVIDED, HOWEVER, that such delivery shall not be deemed to cure any
breach of a representation, warranty, covenant or agreement or to satisfy any
condition.
6.8 NO MERGERS, CONSOLIDATIONS, SALE OF STOCK ETC. Neither Entity will,
directly or indirectly, solicit any inquiries or proposals or enter into or
continue any discussions, negotiations or agreements relating to the sale or
exchange of the Entity's capital stock or the merger of the Entity with, or any
direct or indirect disposition of a significant amount of the Assets or the
business of the Entity to, any person other than the parties to this Agreement
or its affiliates, or provide any assistance or any information to or otherwise
cooperate with any person in connection with any such inquiry, proposal or
transaction. In the event that either Entity, or any of their respective
Affiliates, receives an unsolicited offer for such a transaction or obtains
information that such an offer is likely to be made, the Entity receiving such
offer will provide the other Entity with notice thereof as soon as practical
after receipt, including the identity of the prospective purchaser or soliciting
party.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 28
6.9 LANDLORD CONSENTS. If (and only if) required by a Lease and
requested by the Stockholders, in the case of the Company, or by the Company in
the case of Merged Co, with respect to each Facility Lease, Entity upon whom a
request is made shall use its best efforts to obtain a consent for each such
Lease prior to the Closing Date. In such event the Entity shall send requests
for the consents in such manner as required by each Lease and shall promptly
thereafter provide the other Entity with copies of such requests along with
proof of mailing. Each Entity shall permit the other Entity to provide any
landlord, at such landlord's written request, with such Entity's financial
statements, provided the landlord covenants in writing to keep the information
in such financial statements confidential.
6.10 PAYMENT OF INDEBTEDNESS BY AFFILIATES. Each Stockholder will cause
all indebtedness owed to the Merged Co by such Stockholder or any other
Affiliate of such Stockholder to be paid in full on or prior to Closing.
6.11 APPROVAL OF SHAREHOLDERS. The Board of Directors of the Company,
unless and until it determines, based on the advice of its counsel, that its
fiduciary responsibilities and obligations preclude such recommendation, shall
recommend to the shareholders of the Company approval and adoption of the Merger
and the actions contemplated hereby.
6.12 DISSENTERS' RIGHTS. Merged Co shall not settle or compromise any
claim for dissenters' rights prior to the Effective Time without the prior
written consent of the Company.
6.13 CERTIFICATES OF MERGER. Subject to the terms and conditions of
this Agreement, the Company and Merged Co shall cause appropriate Articles of
Certificates of Merger to be prepared and properly executed and filed with the
Secretary of States of the State of Florida and Nevada on the Closing Date.
ARTICLE 7
CONDITIONS TO MERGED CO'S OBLIGATIONS
The obligations of the Stockholders to consummate the transactions
provided for hereby are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, any of which may be waived by the
Stockholders in accordance with Section 10.5 hereof:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects (except with respect to representations and warranties
which are qualified as to materiality or Material Adverse Effect, which
representations and warranties shall be true and correct) as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, and the
Company shall have performed all agreements and covenants required hereby to be
performed by it prior to or at the Closing Date.
7.2 NO INJUNCTION. No injunction or restraining order shall be in
effect prohibiting the transactions contemplated hereby.
7.3 CERTIFICATES. The Company will furnish Merged Co with such
certificates of its officers and others to evidence compliance with the
conditions set forth in this Article 7 as may be reasonably requested by Merged
Co.
7.4 CORPORATE DOCUMENTS. Merged Co shall have received from the Company
resolutions adopted by the board of directors of the Company approving this
Agreement and the transactions contemplated hereby, certified by the Company's
corporate secretary.
7.5 DUE DILIGENCE. Merged Co shall be satisfied, in its sole
discretion, with the results of its due diligence examination of the Company.
ARTICLE 8
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 29
CONDITIONS TO THE COMPANY'S OBLIGATION
The obligations of the Company to consummate any of the transactions
provided for hereby are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, each of which may be waived by the
Company in accordance with Section 10/5 hereof:
8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of each of the Merged Co contained in this Agreement shall be true
and correct in all material respects (except with respect to representations and
warranties which are qualified as to materiality or Material Adverse Effect,
which representations and warranties shall be true and correct) as of the date
of this Agreement and (except with respect to and to the extent of actions
expressly permitted under Article 6 hereof) as of the Closing Date as though
made on the Closing Date, and Merged Co and the Stockholders shall have
performed all agreements and covenants required hereby to be performed by any of
them prior to or at the Closing Date.
8.2 CONSENTS; REGULATORY COMPLIANCE AND APPROVAL. All Permits,
consents, approvals and waivers from governmental authorities and other parties
necessary to the consummation of the transactions contemplated hereby and for
the operation of Merged Co by the Company (including, without limitation, all
required third party consents) shall have been obtained. The Company shall be
reasonably satisfied that all approvals required under any Regulations to carry
out the transactions contemplated by this Agreement shall have been obtained and
that the parties shall have complied with all Regulations applicable to the
acquisition contemplated hereby.
8.3 NO GOVERNMENTAL PROCEEDINGS OR LITIGATION. No Action by any
governmental authority or other person shall have been instituted or threatened
for the purpose of enjoining or preventing the transactions contemplated by this
Agreement, that (i) questions the validity or legality of the transactions
contemplated hereby, (ii) could reasonably be expected to have a Material
Adverse Effect, or (iii) seeks to enjoin consummation of the transactions
contemplated hereby or could reasonably be expected to cause any of the
transaction contemplated by this Agreement to be rescinded following
consummation.
8.4 DUE DILIGENCE. The Company shall be satisfied, in its sole
discretion, with the results of its due diligence examination of Merged Co.
8.5 NO INJUNCTION. No Injunction or restraining order shall be in
effect prohibiting the transactions contemplated hereby.
8.6 CERTIFICATES. Merged Co will have furnished the Company with such
certificates of the officers of Merged Co and others to evidence compliance with
the conditions set forth in this Article 8 as may be reasonably requested by the
Company.
ARTICLE 9
ACTIONS BY THE PARTIES
AFTER THE CLOSING
9.1 BOOKS AND RECORDS. The Parties agree that each will cooperate with
and make available to the other party, during normal business hours, all Books
and Records, information and Personnel (without substantial disruption of
employment) retained and remaining in existence after the Closing Date that are
related to the business of the Company and that are necessary or useful in
connection with any tax inquiry, audit, investigation or dispute, any litigation
or investigation or any other matter requiring any such Books and Records,
information or Personnel for any reasonable business purpose. The party
requesting any such Books and Records, information or Personnel shall bear all
of the out-of-pocket costs and expenses (including, without limitation,
attorneys' fees, but excluding reimbursement for salaries and employee benefits)
reasonably incurred in connection with providing such Books and Records,
information or Personnel.
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 30
9.2 SURVIVAL OF REPRESENTATIONS, ETC. All of the representations and
warranties made by each party in this Agreement or in any attachment, Exhibit,
Disclosure Schedule, certificate, document or list attached to this Agreement
shall survive the Closing for the period ending five (5) years after the Closing
(and claims based upon or arising out of such representations and warranties may
be asserted at any time before such date); PROVIDED, HOWEVER, that (i) the
representations and warranties set forth in Sections 4.17, 4.23 and 4.24 hereof
shall survive until the expiration of the applicable statute of limitations
(with extensions), and (ii) the representations and warranties set forth in
Section 4.1.2 shall survive in perpetuity with respect to the matters addressed
in such sections. Each party hereto shall be entitled to rely upon the
representations and warranties of the other party set forth in this Agreement.
The termination of the representations and warranties provided herein shall not
affect the rights of a party in respect of any Claim made by such party in a
writing received by the other party prior to the expiration of the applicable
survival period provided herein.
9.3 INDEMNIFICATION. Each Party shall indemnify, save and hold harmless
the other and their Representatives from and against any and all Damages
incurred in connection with, arising out of, resulting from, or incident to (i)
any breach of any representation or warranty or the inaccuracy of any
representation, made in or pursuant to this Agreement, and (ii) any breach of
any covenant or agreement made in or pursuant to this Agreement. All payments to
be made pursuant to this Section 9.3 shall be paid promptly.
9.3.1 MEDIATION AND ARBITRATION. It is understood and
agreed between the parties hereto that any and all Indemnity Claims of any
nature whatsoever, other than Indemnity Claims relating to Taxes or
environmental Claims, arising out of, in connection with, or in relation to (i)
the interpretation, performance or breach of this Article 9, or (ii) the
arbitrability of any Indemnity Claims under this Article 10, shall be resolved
in accordance with a two-step dispute resolution process administered by
American Arbitration Association ("AAA") involving first, mediation before a
retired judge from the AAA panel, followed, if necessary, by final and binding
arbitration before the same, or if requested by either party, another AAA panel
of three persons.
(i) MEDIATION. In the event any Indemnity Claim is
not resolved by an informal negotiation between the parties hereto, within 30
days after the party against whom an Indemnity Claim is asserted receives
written notice that an Indemnity Claim exists, the matter shall be referred to
the Orlando, Florida, offices of AAA for an informal, non-binding mediation
consisting of one or more conferences between the parties in which a certified
mediator will seek to guide the parties to a resolution of the Indemnity Claims.
The parties shall select a mutually acceptable neutral from among the AAA panel
of mediators. In the event the parties cannot agree on a mediator, the
Administrator of AAA will appoint a mediator. The mediation process shall
continue until the earliest to occur of the following: (i) the Indemnity Claims
are resolved, (ii) the mediator makes a finding that there is no possibility of
resolution through mediation, or (iii) 180 days have elapsed since the Indemnity
Claim was first scheduled for mediation.
(ii) ARBITRATION. Should any Indemnity Claims remain
after the completion of the mediation process described above, each party hereto
agrees to submit all remaining Indemnity Claims to final and binding arbitration
administered by AAA in accordance with the then existing AAA Arbitration Rules.
Neither party nor the arbitrators shall disclose the existence, content, or
results of any arbitration hereunder without the prior written consent of all
parties; PROVIDED, HOWEVER, that such prior written consent shall not be
required when an obligation to disclose arises under applicable laws or
governmental regulations or pursuant to a subpoena or other legal process.
Except as provided herein, the Federal Arbitration Act shall govern the
interpretation, enforcement and all proceedings pursuant to this subparagraph
(ii). The arbitrators shall apply the substantive law (and the law of remedies,
if applicable) of the state of Delaware, or federal law, or both, as applicable.
The arbitrators are without jurisdiction to apply any different substantive law.
The arbitrators shall have the authority to entertain a motion to dismiss and/or
a motion for summary judgment by any party and shall apply the standards
governing such motions under the Federal Rules of Civil Procedure. The
arbitrators shall render an award and a written, reasoned opinion in support
thereof. Such award may include reasonable attorneys' fees to the prevailing
party. Judgment upon the award may be entered in any court having jurisdiction
J.A.B. International Trading Co.
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thereof. Any proceedings held by the arbitrators shall be held within the city
of Orlando, Florida, or at such other location mutually acceptable to the
parties hereto.
(iii) ADDITIONAL REMEDIES. Adherence to this dispute
resolution process shall not limit the parties' right to obtain any provisional
remedy, including, without limitation, injunctive or similar relief, from any
court of competent jurisdiction as may be necessary to protect their rights and
interests. Notwithstanding the foregoing sentence, this dispute resolution
procedure is intended to be the exclusive method of resolving any
Indemnification Claims arising out of or relating to this Article 9.
(iv) CONTINUATION OF PERFORMANCE. Unless otherwise
agreed in writing, the Company and the Stockholders shall continue to perform
their respective obligations under this Agreement during any mediation,
arbitration or court proceeding.
9.3.2 DEFENSE OF CLAIMS. If a claim for Damages (an
"Indemnity Claim") is to be made by a party entitled to indemnification
hereunder against the indemnifying party, the party claiming such
indemnification shall, subject to Section 9.2 hereof, give written notice (a
"Claim Notice") to the indemnifying party as soon as practicable after the party
entitled to indemnification becomes aware of any fact, condition or event which
may give rise to Damages for which indemnification may be sought under this
Section 9.3. If any lawsuit or enforcement action is filed against any party
entitled to the benefit of indemnity hereunder, written notice thereof shall be
given to the indemnifying party as promptly as practicable (and in any event
within 15 calendar days after the service of the citation or summons). The
failure of any indemnified party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
indemnifying party demonstrates actual prejudice caused by such failure. After
such notice, the indemnified party against which such claim has been asserted
will (upon delivering notice to such effect to the indemnifying party) have the
right to undertake, at the indemnifying party's cost and expense, the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party, provided that the indemnifying party shall have the
opportunity to advise and comment on the Indemnity Claim. The indemnified party
will keep the indemnifying party reasonably informed of the progress of any such
defense, compromise or settlement. The indemnifying party shall be liable for
any settlement of any action effected pursuant to and in accordance with this
Section 9.3 and for any final judgment (subject to any right of appeal), and the
indemnifying party agrees to indemnify and hold harmless an indemnified party
from and against any Damages by reason of such settlement or judgment.
9.3.3 PRODUCT LIABILITY AND PRODUCT WARRANTY. The
provisions of this Section 9.3 shall cover all liabilities of whatever kind,
nature or description relating, directly or indirectly, to product liability,
product warranties, litigation (to the extent not covered by insurance) or
claims against the Company or Merged Co in connection with, arising out of, or
relating to products sold or shipped or services performed by Merged Co or the
Company, respectively.
9.3.4 BROKERS AND FINDERS. Pursuant to the provisions of
this Section 9.3, each of the Company and Merged Co shall indemnify, hold
harmless and defend the other party from the payment of any and all broker's and
finder's expenses, commissions, fees or other forms of compensation which may be
due or payable from or by the indemnifying party, or may have been earned by any
third party acting on behalf of the indemnifying party in connection with the
negotiation and execution hereof and the consummation of the transactions
contemplated hereby.
9.3.5 REPRESENTATIVES. No individual Representative of any
party shall be personally liable for any Damages under the provisions contained
in this Section 9.3. Nothing herein shall relieve either party of any liability
to make any payment expressly required to be made by such party pursuant to this
Agreement.
9.3.6 DAMAGES. As used in this Section 193, the term
"Damages" shall mean any and all costs, losses, Taxes, liabilities, obligations,
damages, including payments made pursuant to this Article 10, deficiencies,
claims, demands, and expenses (whether or not arising out of third-party
claims), including, without limitation, interest, penalties, costs of
mitigation, losses in connection with any Environmental Law (including, without
limitation, any clean-up or remedial action), lost profits and other
J.A.B. International Trading Co.
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losses resulting from any shutdown or curtailment of operations of the Company,
damages to the environment, reasonable attorneys' fees, all amounts which would
constitute Damages but for payments received under any insurance policy the
premium for which has been paid by any Person that is an Affiliate of the
Company, other than Merged Co, and all amounts paid in investigation, defense or
settlement of any of the foregoing. The term "Damages" as used in this Section
9.3 is not limited to matters asserted by third parties but includes Damages
incurred or sustained in the absence of third-party claims.
9.4 CERTAIN TAX MATTERS. The following provisions shall govern the
allocation of responsibility as between Merged Co and the Company for certain
tax matters following the Closing:
(a) For any Tax years ending on or before the Closing Date,
the Company shall prepare or cause to be prepared all Tax Returns for Merged Co
which are required to (or pursuant to an extension may) be filed after the
Closing Date. Subject to the requirements of applicable law, each such Tax
Return shall be prepared in a manner consistent with Merged Co's past practices.
Each income Tax Return of Merged Co shall be submitted to the Stockholders at
least 30 days prior to the due date (including any extension thereof) for filing
such Tax Return, and the Company shall permit the Stockholders to make comments
on each such Tax Return prior to the filing thereof. The Company shall file
timely or cause to be filed timely such Tax Return.
(b) Merged Co, the Company, and the Stockholders shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section 9.4 and
any audit, litigation or other proceeding with respect to Taxes. Such
cooperation shall include provision of appropriate powers of attorney or similar
authorizations, the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company shall retain all books and records with
respect to Tax matters pertinent to Merged Co relating to any tax periods and
shall abide by all record retention agreements entered into with any taxing
authority, and shall give the Stockholders reasonable written notice prior to
transferring, destroying or discarding any such book and records prior to the
expiration of the applicable statute of limitations for that tax period, and if
the Stockholders so requests in the event of any proposed destruction or
discarding of the books and records, the Company shall allow the Stockholders to
take possession of such books and records. The Company and the Stockholders
shall, upon request, use their best efforts to obtain any certificate or other
document from any governmental authority or any other Person as may be necessary
to mitigate, reduce or eliminate any Tax that could be imposed (including, but
not limited to, with respect to the transactions contemplated hereby). Each
party shall pay its own expenses incurred in complying with this Section
10.4(b).
(c) The Stockholders shall, at their expense, be entitled to
control any Tax audit of Merged Co to the extent such audit affects or may
affect the amount or character of income, gain or loss includible by any of the
Stockholders for periods or portions thereof ending on or before the Closing
Date. The Company shall control all Tax audit issues of Merged Co that the
Stockholders are not entitled, or do not elect, to control.
ARTICLE 10
MISCELLANEOUS
10.1 ASSIGNMENT. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person shall have any right,
benefit or obligation under this Agreement.
10.2 NOTICES; TRANSFER OF FUNDS. All notices, requests, demands and
other communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to
J.A.B. International Trading Co.
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have been duly given when received if personally delivered; when transmitted if
transmitted by telecopy, electronic or digital transmission method; the day
after it is sent, if sent for next day delivery to a domestic address by
recognized overnight delivery service; and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case notice shall be sent to:
If to Merged Co: J. A. B. International Trading Co.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: ▇▇▇- ▇▇▇-▇▇▇▇
With copies to: Grocock & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the Company: Brush Creek Mining and Development, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Board of Directors
or to such other place and with such other copies as any party may designate as
to itself by written notice to the others.
10.3 CHOICE OF LAW. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the internal laws of the
State of Florida without reference to its choice of law provisions, except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
10.4 SUBMISSION TO JURISDICTION. Subject to the provisions of Section
10.3 hereof, each party to this Agreement hereby submits to the non-exclusive
jurisdiction of the United States District Courts for the Middle District of
Florida, Orlando Division and of any Florida State court sitting in Orlando,
Florida, for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each party to this
Agreement hereby irrevocably waives, to the fullest extent permitted by law, any
objections which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
10.5 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement, together
with all exhibits and schedules hereto (including the Disclosure Schedules),
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment, supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
10.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument.
10.7 EXPENSES. Except as otherwise specified in this Agreement, Merged
Co shall pay the legal, accounting, out-of-pocket and other expenses of the
parties incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
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Brush Creek Mining and Development, Inc.
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10.8 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.9 TITLES; GENDER. The titles, captions or headings of the Articles
and Sections herein, and the use of a particular gender, are for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
10.10 PUBLICITY. Except as required by law, no party hereto shall issue
any press release or make any public statement regarding the transactions
contemplated hereby, without the prior approval of the other parties. The
Company or Merged Co may, at their discretion, issue or make an appropriate
press release or public announcement after the execution and delivery of this
Agreement following consultation with the other party.
10.11 BURDEN AND BENEFIT. This Agreement shall be binding upon and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. There are no third party beneficiaries of this
Agreement.
10.12 CUMULATIVE REMEDIES. All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have in equity or at law, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
10.13 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
[Signature contained on following page]
J.A.B. International Trading Co.
Agreement and Plan of Merger with
Brush Creek Mining and Development, Inc.
Page 35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, all as of the day and year first above written.
"MERGED CO"
J.A.B. INTERNATIONAL TRADING CO.
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
"COMPANY"
BRUSH CREEK MINING & DEVELOPMENT CO., INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Director
J.A.B. International Trading Co.
Agreement and Plan of Merger with
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