PLAN OF REORGANIZATION AND AGREEMENT
AMONG
XXXXXXX-XXXX GOLD COMPANY, INC.
(Purchaser),
GBM ACQUISITION CORP.
(Merger Subsidiary),
And
GREAT BASIN MANAGEMENT CO., INC.
(Company)
This Plan of Reorganization and Agreement is made this 3rd
day of January, 1996, by and among XXXXXXX-XXXX GOLD COMPANY,
INC. (the "Purchaser"), a Nevada corporation, GBM ACQUISITION
CORP. (the "Merger Subsidiary"), a Nevada corporation and a
wholly-owned subsidiary of the Purchaser, and GREAT BASIN
MANAGEMENT CO., INC. (the "Company"), a Nevada corporation, and
provides for the Company to become a wholly-owned subsidiary of
the Purchaser by merger of the Merger Subsidiary with and into
the Company, and for the stockholders of the Company, by such
merger, to become stockholders instead of the Purchaser.
WHEREAS, the Purchaser desires to acquire, on the terms and
subject to the conditions reflected below, the business of the
Company; and
WHEREAS, the Company believes that it is desirable and in
the best interests of the Company that its business be combined
with that of the Purchaser by merger of the Merger Subsidiary
with and into the Company so that the Company will become a
wholly-owned subsidiary of the Purchaser as below provided;
NOW, THEREFORE, THE PARTIES TO THIS PLAN OF REORGANIZATION
AND AGREEMENT do hereby agree as follows:
ARTICLE 1. Terms.
As used in this Agreement, the terms identified below in
this Article 1 shall have the meanings indicated, unless a
different and common meaning of the term is clearly indicated by
the context, and variants and derivatives of the following terms
shall have correlative meanings. To the extent that certain of
the definitions set forth below suggest, indicate, or express
agreements between or among parties to this Agreement, or contain
representations or warranties or covenants of a party, the
parties agree to the same by execution of this Agreement. The
parties to this Agreement agree that agreements, representations,
warranties, and covenants expressed in any part or provision of
this Agreement shall, for all purposes of this Agreement, be
treated in the same manner as other such agreements,
representations, warranties, and covenants contained elsewhere in
this Agreement, and the Article or Section of this Agreement
within which such an agreement, representation, warranty, or
covenant appears shall have no separate meaning or effect on the
same.
1.1 Affiliate. When used with respect to a person, an
"affiliate" of that person is a person Controlling, Controlled
by, or under common Control with that person.
1.2 Agreement. This Plan of Reorganization and Agreement,
including all of its schedules and exhibits and all other
documents specifically referred to in this Agreement that have
been or are to be delivered by a party to this Agreement to
another such party in connection with the Transaction or this
Agreement, and including all duly adopted amendments,
modifications, and supplements to or of this Agreement and such
schedules, exhibits, and other documents.
1.3 Articles of Merger. The form of Articles of Merger
providing for the merger of the Merger Subsidiary with and into
the Company as attached hereto as Exhibit 2.1.
1.4 Audited Financial Statements. The balance sheet,
income statement, statement of stockholders' equity, and
statement of cash flows of the Purchaser, as at January 31, 1995,
and for the three (3) years then ended as reported on by Xxxxxx
Xxxxxxxx, LLP, independent certified public accountants.
1.5 Business Day. Any day that is not a Saturday, Sunday,
or day on which banks in New York, New York, or Coeur d'Alene,
Idaho, are authorized to close.
1.6 Closing. The completion of the Transaction, to take
place as described in Article II.
1.7 Closing Date. The date on which the Closing actually
occurs, which shall be January 31, 1996, unless otherwise agreed
by the parties, but shall not in any event be prior to
satisfaction or waiver of the conditions to Closing set forth in
Article VIII hereof.
1.8 Closing Time. The time at which the Closing actually
occurs. All events that are to occur at the Closing Time shall,
for all purposes, be deemed to occur simultaneously, except to
the extent, if at all, that a specific order of occurrence is
otherwise described.
1.9 Code. The Internal Revenue Code of 1986, as amended
and in effect at the time of execution of the Agreement.
1.10 Company. Great Basin Management Co., Inc., a Nevada
corporation which will, pursuant to the transactions described in
this Agreement, become a wholly-owned subsidiary of the
Purchaser. The Company shall include the Company and each of its
Subsidiaries, as an entirety, and representations as to the
Company contained herein shall be deemed to mean the Company and
each of its Subsidiaries, both separately and together as a
consolidated whole, unless and except to the extent expressly
indicated otherwise.
1.11 Company Balance Sheet. The most recent Balance Sheet
included in the Unaudited Financial Statements of the Company.
1.12 Company Disclosure Document. The document delivered by
the Company to the Purchaser containing certain disclosures
regarding the Company as described in Article IV hereof.
1.13 Company Facilities. All warehouses, stores, plants,
production facilities, manufacturing facilities, processing
facilities, fixtures, and improvements owned or leased by the
Company or GBEM or otherwise used by the Company or GBEM in
connection with the operation of its business or leased or
subleased by the Company or GBEM to others.
1.14 Consideration. 3,102 shares of common stock of the
Purchaser, into which each share of capital stock of the Company
outstanding immediately prior to the consummation of the
Transaction will be converted by reason of the Merger.
1.15 Control. Generally, the power to direct the management
or affairs of an Entity.
1.16 Counsel to the Company. Xxxx X. XxXxxxxxx, Esq. of
Reno, Nevada.
1.17 Counsel to the Purchaser. Xxxxx & Xxxxxx, P.C. of
Denver, Colorado.
1.18 Entity. A corporation, partnership, sole
proprietorship, joint venture or other form of organization
formed for the conduct of a business whether active or passive.
1.19 ERISA. The Employee Retirement Income Security Act of
1974, as amended and in effect at the time of execution of this
Agreement.
1.20 GAAP. Generally Accepted Accounting Principles, as in
effect on the date of any statement, report or determination that
purports to be, or is required to be, prepared or made in
accordance with GAAP. All references herein to financial
statements prepared in accordance with GAAP shall mean in
accordance with GAAP consistently applied throughout the periods
to which reference is made.
1.21 GBEM. Great Basin Exploration and Mining Co., Inc, a
Nevada corporation which is a wholly-owed subsidiary of the
Company.
1.22 GBEM Balance Sheet. The most recent Balance Sheet
included in the Unaudited Financial Statements of GBEM.
1.23 IRS. The Internal Revenue Service.
1.24 Liabilities. At any point in time (the "Determination
Time"), the obligations of a person or Entity, whether known or
unknown, contingent or absolute, recorded on its books or not,
arising or resulting in any way from facts, events, agreements,
obligations or occurrences that existed or transpired at a prior
point in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or
payable after the Determination Time to the extent (but only to
the extent) that such obligations (1) arise under previously
existing agreements for services, benefits or other
considerations and (2) accrue or become payable with respect to
services, benefits or other considerations received by the person
or Entity after the Determination Time.
1.25 Local Counsel. Special counsel retained by either
Counsel to the Purchaser or Counsel to the Company, as the case
may be, to advise as to certain matters of state law or local law
in states or localities in which Counsel to the Purchaser, or
Counsel to the Company, as the case may be, desires such Local
Counsel. In all instances due care shall be exercised in the
selection of Local Counsel.
1.26 Merger. The merger of the Merger Subsidiary into the
Company, as provided in the Articles of Merger.
1.27 Merger Subsidiary. GBM Acquisition Corp., a Nevada
corporation which is a wholly-owned subsidiary of the Purchaser.
1.28 Payables. Liabilities of a party arising from the
borrowing of money or the incurring of obligations for
merchandise or goods purchased.
1.29 Proprietary Rights. Trade secrets, copyrights,
patents, trademarks, service marks, customer lists, and all
similar types of intangible property developed, created, or owned
by the Company, or used by the Company in connection with its
business, whether or not the same are entitled to legal
protection.
1.30 Purchaser. Xxxxxxx-Xxxx Gold Company, Inc., a Nevada
corporation which, under the terms of this Agreement is acquiring
the business of the Company.
1.31 Purchaser Balance Sheet. The most recent Balance Sheet
included in the Unaudited Financial Statements of the Purchaser.
1.32 Purchaser's Securities. Shares of Common Stock, $.001
par value, of the Purchaser issuable in respect of outstanding
shares of capital stock of the Company pursuant to the Merger.
1.33 Receivables. Accounts Receivable, notes receivable,
and other obligations appearing as assets on the books of the
Company, and customarily reflected as assets in balance sheets of
entities prepared in accordance with GAAP, indicating moneys owed
to the entity.
1.34 SEC. The Securities and Exchange Commission.
1.35 Subsidiary. With respect to any Entity, another Entity
of which fifty percent (50%) or more of the effective voting
power, or the effective power to elect a majority of the board of
directors or similar governing body, or fifty percent (50%) or
more of the true equity interest, is owned by such first Entity,
directly or indirectly.
1.36 Transaction. The Merger and the related transactions
contemplated by this Agreement.
1.37 Unaudited Financial Statements. In the case of the
Company, the balance sheet as of September 30, 1995, in the case
of GBEM, the balance sheet as of May 31, 1995, and in the case of
the Purchaser, the balance sheet, income statement and statement
of cash flows as at October 31, 1995, and for the nine months
then ended.
ARTICLE 2. The Transaction.
2.1 The Transaction. On the Closing Date, and at the
Closing Time, subject in all instances to each of the terms,
conditions, provisions and limitations contained in this
Agreement, the Merger Subsidiary will merge with and into the
Company, by the filing with the Secretary of the State of Nevada
of the fully executed Articles of Merger, in a form identical in
all material respects to that attached hereto as Exhibit 2.1, and
such other documents as may be required by applicable law to
effectuate the Merger, (1) each share of capital stock of the
Company outstanding prior to the Transaction will, by said
occurrence and with no further action on the part of the holder
thereof, be transformed and converted into the right to receive,
upon surrender of the certificate for such share of capital stock
of the Company, the Consideration, without interest or any
similar payment thereon or with respect thereto; (2) each share
of common stock of the Merger Subsidiary outstanding prior to the
Merger will, by said occurrence and with no further action on the
part of the holder thereof, be transformed and converted into one
share of capital stock of the Company, so that thereafter the
Purchaser will be the sole and exclusive owner of equity
securities of the Company; (3) the officers of the Company
immediately prior to the effectiveness of the Merger will
continue to hold such offices immediately after the effectiveness
of the Merger, and thereafter subject at all times to the
discretion of the board of directors of the Company; (4) the
board of directors of the Merger Subsidiary immediately prior to
the effectiveness of the Merger will be the board of directors of
the Company immediately after the Merger; (5) the Company, as the
surviving Entity of the Merger, shall be the owner of all of the
business, assets, rights and other attributes theretofore held by
either the Merger Subsidiary or the Company; and (6) the name of
the Company shall thereafter be the same as the name of the
Company prior to the Transaction.
2.2 Consideration. Pursuant to the Transaction each holder
of shares of capital stock of the Company immediately prior to
the Merger shall be entitled to receive, from and after the
effectiveness of the Merger, in respect of each share of capital
stock of the Company outstanding immediately prior to the
Transaction owned by such holder (and upon surrender of the
certificate(s) therefor, duly endorsed and in all respects in
proper form for transfer), the Consideration.
2.3 Closing. The Closing hereunder shall take place at the
offices of Xxxxx & Xxxxxx, P.C., at Denver, Colorado or at such
other place as the Purchaser and the Company may agree upon, on
the Closing Date.
2.4 Parties to the Agreement and Transaction. To the
extent that any provision of this Agreement calls for agreement
by the Company as a part hereto, such provision shall mean the
Company as it exists prior to the consummation of the Merger.
If, after such consummation, such a provision requires amendment,
modification, interpretation, etc., the same may be accomplished
by (but only by) a majority in interest of those receiving the
Consideration as a result of the Transaction, and not by the
Company.
ARTICLE 3. Representations and Warranties of The Purchaser.
The Purchaser hereby represents and warrants to the Company
as follows:
3.1 Organization and Qualification. Each of the Purchaser
and the Merger Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and each has the
requisite corporate power and authority to carry on its business
as it is now being conducted. The Purchaser is, and the Merger
Subsidiary is, or will prior to the closing be, duly qualified as
a foreign corporation to do business, and in good standing, in
each jurisdiction where the character of the properties owned or
leased by it, or the nature of its activities, is such that
qualification as a foreign corporation in that jurisdiction is
required by law.
3.2 Authority Relative to this Agreement. Each of the
Purchaser and the Merger Subsidiary has the requisite corporate
power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized and approved by the board of
directors of the Purchaser and of the Merger Subsidiary and,
subject only to approval by the shareholder of the Merger
Subsidiary no other corporate proceedings on the part of the
Purchaser or the Merger Subsidiary are necessary to approve and
adopt this Agreement or to approve the consummation of the
Transactions contemplated hereby, including delivery of the
Consideration. This Agreement has been duly and validly executed
and delivered by the Purchaser and the Merger Subsidiary and
constitutes a valid and binding Agreement of the Purchaser and of
the Merger Subsidiary, enforceable in accordance with its terms.
3.3 Absence of Breach; No Consents. The execution,
delivery, and performance of this Agreement, and the performance
by the Purchaser and the Merger Subsidiary of their obligations
hereunder (except for compliance with any regulatory or licensing
laws applicable to the business of the Purchaser, all of which,
to the extent applicable to the Purchaser or the Merger
Subsidiary (and to the extent within the control of either), will
be satisfied in all material respects prior to the Closing) do
not, except as disclosed in Schedule 3.3: (1) conflict with, and
will not result in a breach of, any of the provisions of the
Articles of Incorporation or By-Laws of the Purchaser or of any
of its Subsidiaries; (2) contravene any law, rule, or regulation
of any State or Commonwealth or of the United States, or of any
applicable foreign jurisdiction, or any order, writ, judgment,
injunction, decree, determination, or award affecting or binding
upon the Purchaser or any of its Subsidiaries or any of its or
their material properties, or cause the suspension or revocation
of any authorization, consent, approval, or license, presently in
effect, which affects or binds the Purchaser or any of its
Subsidiaries or any of its or their material properties, except
in any such case where such contravention will not have a
material adverse effect on the business, condition (financial or
otherwise), operations, or prospects of the Purchaser; (3)
conflict with or result in a material breach of or default under
any material indenture or loan or credit agreement or any other
material agreement or instrument to which the Purchaser or any of
its Subsidiaries is a party or by which it or they or any of its
or their material properties may be affected or bound; (4)
require the authorization, consent, approval or license of any
third party of such a nature that the failure to obtain the same
would have a material adverse effect on the business, condition
(financial or otherwise), operations or prospects of the
Purchaser; or (5) constitute grounds for the loss or suspension
of any permits, licenses or other authorizations material to the
business, condition (financial or otherwise), operations or
prospects of the Purchaser.
3.4 Brokers. No broker, finder, or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with this Agreement or the Transaction or any related
transaction based upon any agreements, written or oral, made by
or on behalf of the Purchaser or any of its Subsidiaries.
3.5 Disclosure. The Purchaser has heretofore delivered to
the Company each of the following:
(1) Annual report of the Purchaser on Form 10-K as filed
with the SEC for the Purchaser's fiscal year ended
January 31, 1995;
(2) Quarterly reports of the Purchaser on Form 10-QSB as
filed with the SEC, including the Unaudited Financial
Statements of the Purchaser therein, and all other
reports of the Purchaser filed with the SEC, to the
extent that such reports have been filed with the SEC
after the filing of the report referred to in (1) above
and prior to the execution hereof.
Each of such documents, at the time it was prepared, and all
of such documents taken together, did not and do not contain an
untrue statement of a material fact or omit to state any material
fact necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
All of the financial statements contained in the foregoing
documents were prepared from the books and records of the
Purchaser. The Audited Financial Statements were prepared in
accordance with GAAP, and fairly and accurately reflect the
financial position and condition of the Purchaser as at the dates
and for the periods indicated. The Unaudited Financial
Statements were prepared in a manner not inconsistent with the
basis of presentation used in the Audited Financial Statements,
and fairly present the financial position and condition of the
Purchaser as at and for the periods indicated, subject to normal
year-end adjustments, none of which will be material.
ARTICLE 4. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as
follows:
4.1 Organization and Qualification. The Company is, and
each of its Subsidiaries is, a corporation duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and each has the
requisite corporate power and authority to carry on its business
as it is now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the
character of the properties owned or leased by it, or the nature
of its activities, is such that qualification as a foreign
corporation in that jurisdiction is required by law.
4.2 Capitalization. The authorized capital stock of the
Company consists of 2,500 shares, no par value. There is no
other capital stock authorized for issuance. As of the date of
the Company Balance Sheet 1,330 shares of capital stock were
validly issued and outstanding, fully paid, and nonassessable, no
shares of capital stock were held in the Company treasury, and no
shares were reserved for issuance, nor were there outstanding any
options, warrants, convertible instruments or other rights,
agreements or commitments to acquire capital stock of the
Company, except as fully and completely described on Schedule 4.2
hereto. Since the date of the Company Balance Sheet, no shares
of the Company's capital stock, or options, warrants, or other
rights, agreements or commitments (contingent or otherwise)
obligating the Company or any of its Subsidiaries to issue shares
of capital stock, have been executed or issued.
4.3 Authority to Relative to this Agreement. This
Agreement has been duly and validly executed and delivered by the
Company and constitutes a valid and binding Agreement of the
Company enforceable in accordance with its terms, subject,
however, to the approval of shareholders of the company as
provided for elsewhere in this Agreement. The Company has all
requisite corporate power and authority to enter into this
Agreement and to carry out the Transaction contemplated hereby,
and its doing so has been duly and sufficiently authorized,
subject only to shareholder approval and to governmental
regulatory approvals as and to the extent specifically set forth
elsewhere in this agreement.
4.4 Absence of Breach; No Consent. The execution,
delivery, and performance of this Agreement, and the performance
by the Company of its obligations hereunder, do not, except as
disclosed in Schedule 4.4: (1) conflict with or result in a
breach of any of the provisions of the Articles of Incorporation
or Bylaws of the Company or of any of its Subsidiaries; (2)
contravene any law, ordinance, rule, or regulation of any State
or Commonwealth or political subdivision of either or of the
United States (except for compliance with regulatory or licensing
laws all of which, to the extent applicable to the Company (and
to the extent within the control of the Company), will be
satisfied in all material respects prior to the Closing), or of
any applicable foreign jurisdiction, or contravene any order,
writ, judgment, injunction, decree, determination, or award of
any court or other authority having jurisdiction, or cause the
suspension or revocation of any authorization, consent, approval,
or license, presently in effect, which affects or binds, the
Company or any of its Subsidiaries or any of its or their
material properties, except in any such case where such
contravention will not have a material adverse effect on the
business, condition (financial or otherwise), operations or
prospects of the Company and its Subsidiaries, taken as a whole,
and will not have a material adverse effect on the validity of
this Agreement or on the validity of the consummation of the
Transaction; (3) conflict with or result in a material breach of
or default under any material indenture or loan or credit
agreement or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which it
or they or any of its or their material properties may be
affected or bound; (4) other than consents disclosed on the
Company Disclosure Document, require the authorization, consent,
approval, or license of any third party; or (5) constitute
grounds for the loss or suspension of any permits, licenses, or
other authorizations used in the business of the Company.
4.5 Brokers. No broker, finder, or investment banker is
entitled to any brokerage, finder's, or other fee or commission
in connection with this Agreement or the Transaction or any
related transaction based upon any agreements, written or oral,
made by or on behalf of Company or any of its Subsidiaries. The
Company does not have any obligation to pay finder's or broker's
fees or commissions in connection with the exercise of options to
renew or extend real estate leases to which the Company is a
party.
4.6 Financial Statements. The Company has heretofore
delivered to the Purchaser the Unaudited Financial Statements of
the Company and GBEM. The Unaudited Financial Statements were
prepared in accordance with GAAP, and fairly and accurately
reflect the financial position and condition of the Company and
GBEM as at the dates indicated, subject to normal year-end
adjustments, none of which will be material. Without limiting
the foregoing, at the date of the Company Balance Sheet and the
GBEM Balance Sheet, the Company and GBEM owned each of the assets
included in preparation of the Company Balance Sheet and the GBEM
Balance Sheet, and the valuation of such assets in the Company
Balance Sheet and the GBEM Balance Sheet is not more than their
fair saleable value (on an item-by-item basis) at that date; and
the Company and GBEM had no Liabilities other than those included
in the Company Balance Sheet and the GBEM Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them
in the Company Balance Sheet and the GBEM Balance Sheet. From
the date hereof through the Closing Date the Company and GBEM
will continue to prepare financial statements on the same basis
that they have done so in the past, the Company will promptly
deliver the same to the Purchaser, and agrees that from and after
such delivery the foregoing representations will be applicable to
each financial statement so prepared and delivered.
4.7 Absence of Material Differences from Disclosure
Document. Except as specifically disclosed in the Company
Disclosure Document:
(1) No Undisclosed Liabilities. Neither the Company nor
any of its Subsidiaries has any Liabilities which are
not adequately reflected or reserved against on the
face of the Company Balance Sheet and the GBEM Balance
Sheet, except Liabilities incurred since the date of
the Company Balance Sheet and the GBEM Balance Sheet in
the ordinary course of business and consistent with
past practice. Without limiting the foregoing, (a)
there are no unpaid leasehold improvements at any of
the Company's or GBEM's facilities or locations for
which the Company or GBEM is or will be responsible,
and (b) there are no deferred rents due to lessors at
or with respect to any of such facilities or locations,
and (c) the Company Disclosure Document sets forth, as
a part thereof, each Liability of the Company and GBEM
in an amount in excess of $10,000 and the aggregate
amount of Liabilities to each person to whom such
aggregate exceeds $10,000.
(2) No Material Adverse Change, Etc. Since the date of the
Company Balance Sheet and the GBEM Balance Sheet, other
than as contemplated or caused by this Agreement, there
has not been: (a) any material adverse change in the
business, condition (financial or otherwise),
operations, or prospects of the Company or GBEM; (b)
any damage, destruction, or loss, whether covered by
insurance or not, having a material adverse effect on
the business, condition (financial or otherwise),
operations, or prospects of the Company or GBEM; (c)
any entry into or termination of any material
commitment, contract, agreement, or transaction
(including, without limitation, any material borrowing
or capital expenditure or sale or other disposition of
any material assets or assets) of or involving the
Company or GBEM other than this Agreement and
agreements executed in the ordinary course of business;
(d) any redemption, repurchase, or other acquisition
for value of its capital stock by the Company, or any
issuance of capital stock of the Company or any
Subsidiary of the Company or of securities convertible
into or rights to acquire any such capital stock or any
dividend or distribution declared, set aside, or paid
on capital stock of the Company; (e) any transfer of or
right granted under any material lease, license,
agreement, patent, trademark, trade name, or copyright
of the Company or GBEM; (f) any sale or other
disposition of any asset of the Company or of any
Subsidiary of the Company, or any mortgage, pledge, or
imposition of any lien or other encumbrance on any
asset of the Company or of any Subsidiary of the
Company, other than in the ordinary course of business,
or any agreement relating to any of the foregoing; or
(g) any default or breach by the company or any
Subsidiary of the Company in any material respect under
any contract, license or permit. Since the date of the
Company Balance Sheet and the GBEM Balance Sheet, the
Company and its Subsidiaries have conducted their
business only in the ordinary and usual course, and,
without limiting the foregoing, no changes have been
made in (a) executive compensation levels, (b) the
manner in which other employees of the Company and its
Subsidiaries are compensated, or (c) supplemental
benefits provided to any such executives or other
employees, except, in any such case, in the ordinary
course of business and, in any event, without material
adverse effect on the business, condition (financial or
otherwise), operations, or prospects of the Company or
GBEM.
(3) Taxes. The Company and its Subsidiaries have properly
filed or caused to be filed all federal, state, local,
and foreign income and other tax returns, reports, and
declarations that are required by applicable law to be
filed by them, and have paid, or made full and adequate
provision for the payment of, all federal, state,
local, and foreign income and other taxes properly due
for the periods covered by such returns, reports, and
declarations, except such taxes, if any, as are
adequately reserved against in the Company Balance
Sheet and the GBEM Balance Sheet.
(4) Litigation. (a) No material investigation or review by
any governmental entity with respect to the Company or
any of its Subsidiaries is pending or, to the best of
the knowledge of the Company, threatened (other than
inspections and reviews customarily made of businesses
such as that of the Company and GBEM), nor has any
governmental entity indicated to the Company or GBEM an
intention to conduct the same, and (b) there is no
action, suit, or proceeding pending or, to the best of
the knowledge of the Company, threatened against or
affecting the Company or its Subsidiaries at law or in
equity, or before any federal, state, municipal, or
other governmental department, commission, board,
bureau, agency, or instrumentality. The Company
Disclosure Document includes a brief description of
each litigation matter included therein except claims
(including punitive damage claims, if any) for amounts
of less than $10,000.
(5) Employees, Etc. There are, except as disclosed on the
Company Disclosure Document, no collective bargaining,
bonus, profit sharing, compensation, or other plans,
agreements, trusts, funds, or arrangements maintained
by the Company or any Subsidiary of the Company for the
benefit of their directors, officers, or employees, and
there are no employment, consulting, severance, or
indemnification arrangements, agreements or
understandings between the Company or any of its
Subsidiaries, on the one hand, and any current or
former directors, officers, or other employees (or
Affiliates thereof) of the Company or any of its
Subsidiaries, on the other hand. The Company and GBEM
are not, and following the Closing will not be, bound
by any express or implied contract or agreement to
employ, directly or as a consultant or otherwise, any
person for any specific period of time or until any
specific age except as specified in agreements in
writing identified in the Company Disclosure Document
or executed pursuant to the provisions hereof, if any.
(6) Compliance with Laws. Each of the Company and its
Subsidiaries is in substantial compliance with all, and
has received no notice of any violation of any, laws or
regulations applicable to its operations, including
without limitation the use of premises occupied by it,
or with respect to which compliance is a condition of
engaging in any aspect of the business of the Company
and its Subsidiaries and each has all permits,
licenses, zoning rights, and other governmental
authorizations necessary to conduct its business as
presently conducted.
(7) Ownership of Assets. Each of the Company and its
Subsidiaries has, except as disclosed in the Company
Disclosure Document, good, marketable, and insurable
title, or valid, effective, and continuing leasehold
rights in the case of leased property, to all real
property (as to which, in the case of owned property,
such title is fee simple) and all personal property
owned or leased by it or used by it in the conduct of
its business in such a manner as to create the
appearance or reasonable expectation that the same is
owned or leased by it, free and clear of all liens,
claims, encumbrances, and charges, except liens for
taxes not yet due and minor imperfections of title and
encumbrances, if any, which singly and in the aggregate
are not substantial in amount and do not materially
detract from the value of the property subject thereto
or materially impair the use thereof. The Company does
not know of any potential action by any party,
governmental or other, and no proceedings with respect
thereto have been instituted of which the Company has
notice, that would materially affect the Company's
ability to use and to utilize each of such assets in
its business or in the business of its Subsidiaries.
The Company has received no notices from any mortgagee
regarding any properties leased by the Company.
(8) Proprietary Rights. The Company and its Subsidiaries
among them possess full ownership of, or adequate and
enforceable long-term licenses or other rights to use
(without payment), all Proprietary Rights owned by or
registered in the name of the Company or any of its
Subsidiaries or used in the business of the Company or
any of its Subsidiaries; the Company has not received
any notice of conflict which asserts the rights of
others with respect thereto; and each of the Company
and its Subsidiaries has in all material respects
performed all of the obligations required to be
performed by it, and is not in default in any material
respect, under any agreement relating to any
Proprietary Right.
(9) Subsidiaries, Etc. All of the Subsidiaries of the
Company (if any), direct or indirect, are identified in
the Company Disclosure Document, the Company has no
other Subsidiaries, and neither the Company nor any of
its Subsidiaries described in the Company Disclosure
Document is a partner of or joint venturer with any
other person or entity except as therein described.
All of the issued and outstanding shares of capital
stock of each Subsidiary are owned of record and
beneficially by the Company or another Subsidiary of
the Company, are validly issued, fully paid and
nonassessable and are owned free and clear of all
liens, charges, claims, pledges, security interests,
equities, encumbrances, reservations or contractual
restrictions on transfer of any nature whatsoever; and
no Subsidiary has outstanding any securities, warrants,
options or other rights convertible into or
exchangeable or exercisable for any shares of its
capital stock, and there are no contracts, commitments,
understandings, arrangements or restrictions by which
any Subsidiary is bound to issue shares of its capital
stock.
(10) Trade Names. The Company Disclosure Document
identifies each trade name, fictitious business name,
or other similar name under which the Company or its
Subsidiaries have conducted any business during the ten
(10) years preceding the date of this Agreement.
(11) Employee Benefit Plans. Except as disclosed in the
Company Disclosure Document, neither the Company nor
any of its Subsidiaries maintains or contributes to any
pension plan or any welfare plan, nor is the Company or
any of its Subsidiaries presently, nor has it been
within the last six years, a participating employer in
any multiemployer plan. For purposes of this Section
4.7(11) the terms "pension plan", "welfare plan" and
"multiemployer plan" shall have the meanings ascribed
to them in the applicable sections of the Code or ERISA
or of other law, as the case may be, and any
regulations thereunder or judicial or administrative
interpretations thereof.
(12) Facilities. The Company Facilities are (as to physical
plant and structure) structurally sound and none of the
Company Facilities, nor any of the vehicles or other
equipment used by the Company or GBEM in connection
with its business, has any material defects and all of
them are in all material respects in good operating
condition and repair and are adequate for the uses to
which they are being put; none of such Company
Facilities, vehicles or other equipment is in need of
maintenance or repairs except for ordinary, routine
maintenance and repairs which are not material in
nature or cost. Neither Company nor any of its
Subsidiaries is in breach, violation, or default of any
lease with respect to or as a result of which the other
party (whether lessor, lessee, sublessor, or sublessee)
thereto has the right to terminate the same, and
neither the Company nor any of its Subsidiaries has
received notice of any claim or assertion that it is or
may be in any such breach, violation, or default.
(13) Contracts. Except as identified in the Company
Disclosure Document, neither the Company nor any of its
Subsidiaries has any contracts, agreements, or
understandings, whether express or implied, written or
verbal, provided, however, that the Company or its
Subsidiaries may have, and the Company Disclosure
Document need not identify, any such contracts,
agreements, or understandings that fall into one of the
following categories: (a) those that are terminable on
notice of less than thirty-two (32) days and do not
involve payments or obligations of more than $5,000 in
any period of thirty-one (31) days or less (on
termination or otherwise); or (b) those that involve
aggregate payment obligations remaining unpaid as of
the date of the Agreement of less than $5,000. The
Company Disclosure document shall, however, identify
the aggregate amount of payment obligations remaining
unpaid as of the date of the Agreement of all contracts
exempt from disclosure by (b) above. The Company
Disclosure Document includes a brief summary of each
such contract, agreement or understanding identified
therein. Without in any respect limiting the
foregoing, the Company Disclosure Document contains a
description of all leases of properties by the Company
or its Subsidiaries, including all amendments,
supplements, extensions, and modifications thereof,
identifying, inter alia, the date each such document
was executed and its effective period. Neither the
Company nor any of its Subsidiaries is a party to any
executory contract to sell or transfer any part of any
leasehold interest of the Company or its Subsidiaries.
True and accurate copies of all leases, and of all
amendments, supplements, extensions, and modifications
thereof, have heretofore been delivered to the
Purchaser by the Company.
(14) Accounts Payable. The accounts payable reflected on
the Company Balance Sheet and the GBEM Balance Sheet
do, and those reflected on the books of the Company and
its Subsidiaries at the time of the Closing will,
reflect all amounts owed by the Company and its
Subsidiaries in respect of trade accounts due and other
Payables, and the actual Liability of the Company and
its Subsidiaries in respect of such obligations was
not, and will not be, on any of such dates, in excess
of the amounts so reflected on the balance sheets or
the books of the Company and its Subsidiaries, as the
case may be.
(15) Labor Matters. Except as set forth in the Company
Disclosure Document, there are no activities or
controversies, including, without limitation, any labor
organizing activities, election petitions or
proceedings, proceedings preparatory thereto, unfair
labor practice complaints, labor strikes, disputes,
slowdowns, or work stoppages, pending or, to the best
of the knowledge of the Company, threatened, between
the Company or any of its Subsidiaries and any of its
or their employees.
(16) Insurance. The Company and its Subsidiaries have
insurance policies in full force and effect which
provide for coverages which are usual and customary in
the business of the Company and its Subsidiaries as to
amount and scope, and are adequate to protect the
Company against any reasonable foreseeable risk of
loss. The Company Disclosure Document identifies each
of the Company's and its Subsidiaries' insurance
policies, indicating the carrier, amount of coverage,
annual premium, risks covered, placing broker or agent
and other relevant information as to each. Neither the
Company nor any of its Subsidiaries has within the past
three (3) years received any notice of cancellation of
any insurance agreement.
(17) Title to and Utilization of Real Properties. Except as
disclosed in the Company Disclosure Document, the
Company and each of its Subsidiaries owns fee, simple,
insured title to all real property owned by such and
has the unbridled right to use the same, and is not
aware of any claim, notice or threat to the effect that
its right to own and use such property is subject in
any way to any challenge, claim, assertion of rights,
proceedings toward condemnation or confiscation, in
whole or in part, or is otherwise subject to challenge.
Each parcel or real property owned or leased by the
Company or any of its Subsidiaries is free of any and
all hazardous wastes, toxic substances or other types
of contamination or matters of environmental concern,
and the Company and its Subsidiaries are not subject to
any Liability resulting from or related to any such
wastes, substances, contaminants or matters of
environmental concern in connection with any such
property.
4.8 Full Disclosure. The documents, certificates, and
other writings furnished or to be furnished by or on behalf of
the Company to the Purchaser pursuant to the provisions of this
Agreement, taken together in the aggregate, do not and will not
contain any untrue statement of a material fact, or omit to state
any material fact necessary to make the statements made, in the
light of the circumstances under which they are made, not
misleading.
4.9 Actions Since Balance Sheet Date. Except as set forth
on the Company Disclosure Document, since the date of the Company
Balance Sheet and the GBEM Balance Sheet, the Company has taken
no actions that would be prohibited under the provisions of this
Agreement (without the prior consent of the Purchaser) after the
date of this Agreement.
ARTICLE 5. Covenants of the Purchaser and the Merger
Subsidiary
5.1 Affirmative Covenants. From the date hereof through
the Closing Date, the Purchaser and the Merger Subsidiary will
take every action reasonably required of either of them in order
to satisfy the conditions to closing set forth in this Agreement
and otherwise to ensure the prompt and expedient consummation of
the Transaction substantially as contemplated hereby, and will
exert all reasonable efforts to cause the Transaction to be
consummated, provided in all instances that the representations
and warranties of the Company in this Agreement are and remain
true and accurate and that the covenants and agreements of the
Company in this Agreement are honored and that the conditions to
the obligations of the Purchaser and the Merger Subsidiary set
forth in this Agreement are not incapable of satisfaction.
5.2 Cooperation. The Purchaser shall cooperate with the
Company and its counsel, accountants and agents in every way in
carrying out the transactions contemplated herein, and in
delivering all documents and instruments deemed reasonably
necessary or useful by Counsel to the Company.
5.3 Expenses. Whether or not the Transaction is
consummated, all costs and expenses incurred by the Purchaser and
the Merger Subsidiary in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Purchaser
except as otherwise provided (directly or indirectly) herein.
5.4 Publicity. Prior to the Closing any written news
releases by the Purchaser pertaining to this Agreement or the
Transaction shall be submitted to the Company for review and
approval prior to release by the Purchaser, and shall be released
only in a form approved by the Company, provided, however, that
(1) such approval shall not be unreasonably withheld and (2) such
review and approval shall not be required of releases by the
Purchaser if prior review and approval would prevent the timely
and accurate dissemination of such press release as required to
comply, in the judgment of counsel, with any applicable law,
rule, or policy.
5.5 Updating of Exhibits and Disclosure Documents. The
Purchaser shall notify the Company of any changes, additions or
events which may cause any change in or addition to any Schedules
or Exhibits delivered by it under this Agreement, promptly after
the occurrence of the same and at the Closing by the delivery of
updates of all Schedules and Exhibits. No notification made
pursuant to this Section shall be deemed to cure any breach of
any representation or warranty made in this Agreement unless the
Company specifically agrees thereto in writing nor shall any such
notification be considered to constitute or give rise to a waiver
by the Company of any condition set forth in this Agreement.
ARTICLE 6. Covenants of the Company
6.1 Affirmative Covenants. From the date hereof through
the Closing Date, the Company will take every action reasonably
required of it to satisfy the conditions to closing set forth in
this Agreement and otherwise to ensure the prompt and expedient
consummation of the Transaction substantially as contemplated
hereby, and will exert all reasonable efforts to cause the
Transaction to be consummated, provided in all instances that the
representations and warranties of the Purchaser in this Agreement
are and remain true and accurate and that the covenants and
agreements of the Purchaser in this Agreement are honored and
that the conditions to the obligations of the Company set forth
in this Agreement are not incapable of satisfaction and subject,
at all times, to the right and ability of the directors of the
Company to satisfy their fiduciary obligations.
6.2 Access and Information. The Company shall afford to
the Purchaser and to the Purchaser's accountants, counsel and
other representatives reasonable access during normal business
hours throughout the period prior to the Closing to all of its
and its Subsidiaries properties, books, contracts, commitments,
records (including, but not limited to, tax returns), and
personnel, and, during such period, the Company shall furnish
promptly to the Purchaser (1) all written communications to its
directors or to its shareholders generally, (2) internal monthly
financial statements when and as available, and (3) all other
information concerning its or any of its Subsidiaries' business,
properties, and personnel as the Purchaser may reasonably
request, but no investigation pursuant to this Section 6.2 shall
affect any representations or warranties of the Company, or th
conditions to the obligations of the Purchaser to consummate the
Transaction contained in this Agreement. In the event of the
termination of this Agreement, the Purchaser will, and will cause
its representatives to, deliver to the Company or destroy all
documents, work papers and other material, and all copies
thereof, obtained by it or on its behalf from the Company (or any
Subsidiary) as a result of this Agreement or in connection
herewith, whether so obtained before or after the execution
hereof, and will hold in confidence all confidential information
that has been designated as such by the Company in writing or by
appropriate and obvious notation, and will not use any such
confidential information except in connection with the
Transaction, until such time as such information is otherwise
publicly available. The Purchaser and its representatives shall
assert their rights hereunder in such manner as to minimize
interference with the business of the Company
6.3 No Solicitation. The Company and its respective
Subsidiaries, and those acting on behalf of any of them will not,
and the Company will use its best efforts to cause its officers,
employees, agents, and representatives (including any investment
banker) not, directly or indirectly, to solicit, encourage, or
initiate any discussions with, or negotiate or otherwise deal
with, or provide any information to, any person or Entity other
than the Purchaser and its officers, employees, and agents,
concerning any merger, sale of substantial assets, or similar
transaction involving the Company or any Subsidiary or division
of the Company or any sale of any of its capital stock or of the
capital stock or assets of any Subsidiary or division of the
Company. The Company will notify the Purchaser immediately upon
receipt of any inquiry, offer or proposal relating to any of the
foregoing. None of the foregoing shall prohibit providing
information to others in a manner in keeping with the ordinary
conduct of the Company's business, or providing information to
government authorities.
6.4 Conduct of Business Pending the Transaction. The
Company covenants and agrees with the Purchaser that, prior to
the consummation of the Transaction or the termination of this
Agreement pursuant to these terms, unless the Purchaser shall
otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed, and except as otherwise
contemplated by this Agreement or disclosed in the Company
Disclosure Document, the Company will comply with each of the
following:
(1) Its business and the business of its Subsidiaries shall
be conducted only in the ordinary and usual course, it
shall use reasonable efforts and shall cause each of
its Subsidiaries to use reasonable efforts to keep
intact its and their business organizations and good
will, keep available the services of their respective
officers and employees and maintain good relationships
with suppliers, lenders, creditors, distributors,
employees, customers, and others having business or
financial relationships with them, and it shall
immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the
ordinary and usual course of business of, it or any of
its Subsidiaries.
(2) It shall not (a) amend its Articles of Incorporation or
Bylaws, or (b) split, combine, or reclassify any of its
outstanding securities or declare, set aside, or pay
any dividend or other distribution on or make or agree
or commit to make any exchange for or redemption of any
such securities payable in cash, stock, or property.
(3) Neither it nor any of its Subsidiaries shall (a) issue
or agree to issue any additional shares of, or rights
of any kind to acquire any shares of, its capital stock
of any class, or (b) enter into any contract,
agreement, commitment, or arrangement with respect to
any of the foregoing.
(4) Neither it nor any of its Subsidiaries shall create,
incur, or assume any long-term or short-term
indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures,
except in the ordinary course of business and
consistent with past practice.
(5) Neither it nor any of its Subsidiaries shall (a) adopt,
enter into, or amend any bonus, profit-sharing,
compensation, stock option, warrant, pension,
retirement, deferred compensation, employment,
severance, termination, or other employee benefit plan,
agreement, trust fund, or arrangement for the benefit
or welfare of any officer, director or employee, except
as provided herein or (b) agree to any material (in
relation to historical compensation) increase in the
compensation payable or to become payable to, or any
increase in the contractual term of employment of, any
officer, director, or employee.
(6) Neither it nor any of its Subsidiaries shall sell,
lease, mortgage, encumber, or otherwise dispose of or
grant any interest in any of its assets or properties
except for sales, encumbrances, and other dispositions
or grants in the ordinary course of business and
consistent with past practice and except for liens for
taxes not yet due or liens or encumbrances that are not
material in amount or effect and do not impair the use
of the property, or as specifically provided for or
permitted in this Agreement.
(7) Neither it nor any of its Subsidiaries shall enter
into, or terminate, any material contract, agreement,
commitment, or understanding.
(8) Neither it nor any of its Subsidiaries shall enter into
any agreement, commitment, or understanding, whether in
writing or otherwise, with respect to any of the
matters referred to in subparagraphs (1) through (7)
above.
(9) It will continue properly and promptly to file when due
all federal, state, local, foreign, and other tax
returns, reports, and declarations required to be filed
by it, and will pay, or make full and adequate
provision for the payment of, all taxes and
governmental charges due from or payable by it.
(10) It will comply with all laws and regulations applicable
to it and its operations.
(11) It will maintain in full force and effect insurance
coverage of a type and amount customary in its
business, but not less than that presently in effect.
6.5 Cooperation. The Company will cooperate with the
Purchaser and its counsel, accountants and agents in every way in
carrying out the transactions contemplated by this Agreement and
in delivering all documents and instruments deemed reasonably
necessary or useful by the Purchaser.
6.6 Expenses. Whether or not the Transaction is
consummated, all costs and expenses incurred by the Company in
connection with this Agreement and the Transactions shall be paid
by the Company except as otherwise provided (directly or
indirectly) herein.
6.7 Publicity. Prior to the Closing, any written news
releases by the Company pertaining to this Agreement or the
transaction shall be submitted to the Purchaser for review and
approval prior to release by the Company, and shall be released
only in a form approved by the Purchaser, provided, however, that
(1) such approval shall not be unreasonably withheld and (2) such
review and approval shall not be required of releases by the
Company if prior review and approval would prevent the timely and
accurate dissemination of such press release as required to
comply, in the judgment of counsel, with any applicable law, rule
or policy.
6.8 Updating of Exhibits and Disclosure Documents. The
Company shall notify the Purchaser of any changes, additions or
events which may cause any change in or addition to the Company
Disclosure Document or any Schedules or Exhibits delivered by it
under this Agreement promptly after the occurrence of the same
and again at the Closing by delivery of appropriate updates to
the Company Disclosure Document and to all such Schedules and
Exhibits. No such notification made pursuant to this Section
shall be deemed to cure any breach of any representation or
warrant made in this Agreement unless the Purchaser specifically
agrees thereto in writing nor shall any such notification be
considered to constitute or give rise to a waiver by the
Purchaser of any condition set forth in this Agreement.
ARTICLE 7. Conditions to Closing
7.1 Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to effect the Transaction shall be
subject to the fulfillment at or prior to the Closing of the
following conditions, unless the Purchaser shall waive such
fulfillment.
(1) This Agreement and the transactions contemplated hereby
shall have received all approvals, consents,
authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including
lenders, holders of debt securities, lessors and the
shareholder of the Merger Subsidiary) required to
consummate the Transaction (including the expiration of
any applicable waiting period under any regulation or
statute).
(2) There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state court
which prohibits the consummation of the Transaction.
(3) The Company shall have performed in all material
respects each of its agreements and obligations
contained in this Agreement and required to be
performed on or prior to the Closing and shall have
complied with all material requirements, rules, and
regulations of all regulatory authorities having
jurisdiction relating to the Transaction.
(4) No material adverse change shall, in the reasonable
judgment of the Purchaser, have taken place in the
business, condition (financial or otherwise),
operations, or prospects of the Company or GBEM since
the date of the Company Balance Sheet and the GBEM
Balance Sheet other than those, if any, that result
from the changes permitted by, and transactions
contemplated by, this Agreement.
(5) The representations and warranties of the Company set
forth in this Agreement shall be true in all material
respects as of the date of this Agreement and, except
in such respects as, in the reasonable judgment of the
Purchaser, do not materially and adversely affect the
business, condition (financial or otherwise),
operations, or prospects of the Company or GBEM as of
the Closing Time as if made as of such time.
(6) The Purchaser shall have received from the Company an
officer's certificate, executed by the Chief Executive
Officer and the Chief Financial Officer of the Company
(in their capacities as such) dated the Closing Date,
as to the satisfaction of the conditions in paragraphs
(3), (4) and (5) above.
(7) The Purchaser shall have received, on and as of the
Closing Date, an opinion of Counsel to the Company,
substantially as to the matters set forth in Sections
4.1, 4.2, 4.3 (including satisfaction of shareholder,
governmental and regulatory approvals and
requirements), 4.4 (to the best of the knowledge of
such counsel as to parts (2), (3), (4), and (5)), and
4.7 (4 through 9 and 11) (to the best of the knowledge
of such counsel) of this Agreement, all subject to
customary limitations reasonably acceptable to Counsel
to the Purchaser, and which may be based on opinions of
Local Counsel to the extent such Counsel is not
admitted to practice in a jurisdiction relevant to such
opinion, provided such opinion of Local Counsel is
delivered to the Purchaser; and such other closing
documents and instruments as the Purchaser shall
reasonably request, in each case reasonably
satisfactory in form and substance to the Purchaser and
its counsel.
(8) No persons who own shares of common stock of the
Company shall have indicated a desire to exercise
dissenters' rights.
(9) The Purchaser shall have received from each employee of
the Company and GBEM a signed Letter of Employment
Understanding, in the form attached hereto as Exhibit
7.1(9).
(10) The Purchaser shall have received from each shareholder
of the Company a signed Investment Representation
Letter, in the form attached hereto as Exhibit 7.1(10).
7.2 Conditions to Obligation of the Company. The
obligation of the Company to effect the Transaction shall be
subject to the fulfillment at or prior to the Closing of the
following conditions, unless the Company shall waive such
fulfillment:
(1) This Agreement and the Transaction shall have received
all approvals, consents, authorizations, and waivers
from governmental and other regulatory agencies and
other third parties (including lenders, holders of debt
securities, lessors, and shareholders of the Company)
required by law to consummate the Transaction
(including the expiration of any applicable waiting
period under any regulation or statute).
(2) There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state
authority which prohibits the consummation of the
Transaction.
(3) The Purchaser shall have performed in all material
respects its agreements and obligations contained in
this Agreement required to be performed on or prior to
the Closing.
(4) The representations and warranties of the Purchaser set
forth in this Agreement shall be true in all material
respects as of the date of this Agreement and, except
in such respects as do not materially and adversely
affect the business of the Purchaser and its
Subsidiaries, taken as a whole, as of the Closing Date
as if made as of such time.
(5) The Company shall have received from the Purchaser an
officers' certificate, executed by the Chief Financial
Officer and the Chief Executive Officer of the
Purchaser (in their capacities as such), dated as of
the Closing Date, as to the satisfaction of the
conditions of paragraph (3) and (4) above (to the best
of their knowledge where appropriate).
(6) The Company shall have received, on and as of the
Closing Date, an opinion of Counsel to the Purchaser,
substantially as to the matters set forth in Sections
3.1, 3.2 and 3.3 (to the best of the knowledge of such
Counsel) all subject to customary limitations,
reasonably satisfactory in form and substance to the
Company, and its counsel, and which may be based on
opinions of Local Counsel to the extent such Counsel is
not admitted to practice in a jurisdiction relevant to
such opinion, provided such opinion of Local Counsel is
delivered to the Company, and such other closing
documents and instruments as the Company shall
reasonably request, in each case reasonably
satisfactory in form and substance to the Company and
its counsel.
ARTICLE 8. Securities and Security Holders
8.1 Meeting of Shareholders. The Company agrees that, as
soon as practicable after the execution of this Agreement, it
will, in conjunction with and subject to the oversight and
control of the Purchaser and its counsel, commence activities
toward convening a meeting of shareholders of the Company to vote
upon the approval by such shareholders of the Transaction.
ARTICLE 9. Termination, Amendment, Waiver
9.1 Termination. This Agreement and the Transaction may be
terminated at any time prior to the Closing, whether before or
after any approval by shareholders:
(1) By mutual consent of the Purchaser and the Company; or
(2) By either the Purchaser or the Company, upon written
notice to the other, if the conditions to such party's
obligations to consummate the Transaction, in the case
of the Purchaser, as provided in Section 7.1, or, in
the case of the Company, as provided in Section 7.2,
were not, or cannot reasonably be, satisfied on or
before January 31, 1996, unless the failure of
condition is the result of the material breach of this
Agreement by the party seeking to terminate.
9.2 Amendment. This Agreement may be amended by the
Company and the Purchaser by action taken at any time, but after
the Transaction has been approved by the shareholders of the
Company no amendment shall be made which materially reduces the
Consideration or which in any way materially and adversely
affects the rights of the Company or its shareholders without the
further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of
the Company and the Purchaser.
9.3 Waiver. At any time prior to the Closing Date, the
Purchaser or the Company, by action taken by their respective
Boards of Directors, may (1) extend the time for the performance
of any of the obligations or other acts of the other parties
hereto, (2) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant
hereto, or (3) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE 10. General Provisions
10.1 Arbitration. In the event that there shall be a
dispute arising out of or relating to this Agreement, the
Transaction, any document referred to herein or centrally related
to the subject matter hereof, or the subject matter of any of the
same, the parties agrees that such dispute shall be submitted to
binding arbitration in Coeur d'Alene, Idaho, under the auspices
of, and pursuant to the rules of, the American Arbitration
Association as then in effect, or such other procedures as the
parties may agree to at the time, before a tribunal of three
arbitrators, one of which shall be selected by each of the
parties to the dispute and the third of which shall be selected
by the two arbitrators so selected. Any award issued as a result
of such arbitration shall be final and binding between the
parties, and shall be enforceable by any court having
jurisdiction over the party against whom enforcement is sought.
10.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or mailed by registered or certified mail
(return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice given at least five (5) Business Days
prior thereto):
If to the Purchaser, or the Merger Subsidiary:
Xxxxxxx-Xxxx Gold Company, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx x'Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, President
with a copy to:
Xxxxx & Xxxxxx, P.C.
0000 Xxxxxxxx, #0000
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
If to the Company:
Great Basin Management Co., Inc.
0000 Xxxxx Xxxxx
Xxxx, XX 00000
Attention: Dr. Xxxxxxx Xxxxxx, President
with a copy to:
Xxxx X. XxXxxxxxx, Esq.
000 Xxxx Xxxxxxx, #000
P. O. Xxx 0000
Xxxx, XX 00000
10.3 Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.4 Survival of Representations, Warranties, Et Cetera.
The representations, warranties, covenants, and agreements of the
parties contained herein shall survive the Closing and any
investigation of the other party made prior thereto.
Representations and warranties shall so survive for a period of
three (3) years from the Closing. Covenants and agreements shall
survive for the longer of three (3) years from the Closing or one
(1) year after they were to have been performed and were capable
of performance.
10.5 De Minimis Claims. No party shall bring any action
against any other party thereto with respect to the subject
matter hereof unless the aggregate amount of all claims so
brought in relation to the subject matter of this Agreement
exceeds $50,000, provided, however, that the foregoing shall not
prevent or preclude actions seeking injunctive or other equitable
forms of relief.
10.6 Miscellaneous. This Agreement: (1) constitutes the
entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties, with
respect to the subject matter hereof, except as specifically
provided otherwise or refered to herein, so that no such external
or separate agreements relating to the subejct matter of this
Agreement shall have any effect or be binding, unless the same is
referred to specifically in this Agreement or is executed by the
parties after the date hereof; (2) is not intended to confer upon
any other person any rights or remedies hereunder; (3) shall not
be assigned by operation of law or otherwise except for
assignment of all or any part of the rights of the Purchaser
hereunder, which may be freely assigned by the Purchaser so long
as the obligations of the Purchaser under this Agreement remain
obligations of, or their performance is guaranteed by, the
Purchaser; and (4) shall be governed in all respects, including
validity, interpretation and effect, by the internal laws of the
State of Idaho, without regard to the principles of conflict of
laws thereof. This Agreement may be executed in two or more
counterparts which together shall constitue a single agreement.
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be signed on the date first written above by their
respective officers thereunto duly authorized.
The Purchaser:
XXXXXXX-XXXX GOLD COMPANY, INC.
By:/s/ Xxxxxx Xxxxxxx
President
The Merger Subsidiary:
GBM ACQUISITION CORP.
By:/s/ Xxxxxx Xxxxxxx
President
The Company:
GREAT BASIN MANAGEMENT CO., INC.
By: /s/ Dr. Xxxxxxx Xxxxxx
President
