ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
THIS ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION, (hereinafter the
"Agreement") is made and entered into this 20th day of November, 1998 by and
between Rotunda Oil & Mining, Inc., a Utah corporation (hereinafter "Rotunda"),
Euro Trade & Forfaiting Company Limited, a United Kingdom corporation
(hereinafter "ETFC"), and the shareholders of ETFC (hereinafter "Shareholders").
RECITALS
WHEREAS, Rotunda desires to acquire all of the issued and outstanding
shares of ETFC capital stock in exchange for 11,000,000 shares of authorized but
previously unissued Rotunda common stock, par value $.001 per share, post-split
as per Section 1.4 below, and pursuant to the terms and conditions set forth
herein;
WHEREAS, the Shareholders of ETFC desire to exchange all of their
shares of ETFC capital stock for shares of Rotunda common stock in the
respective amounts set forth herein;
WHEREAS, Rotunda and ETFC intend to cooperate in order to facilitate
the offering and sale of up to 4,0000,000 shares of Rotunda common stock
pursuant to an exemption from registration; and
WHEREAS, the parties hereto desire to reorganize the management and
operations of Rotunda, to change the corporate name, and to change the principal
place of business of the corporation.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.1 Acquisition and Plan of Reorganization. The parties hereby agree
that Rotunda shall acquire all of the issued and outstanding shares of ETFC
capital stock and/or options and/or other securities, in exchange for eleven
million (11,000,000) shares of authorized but previously unissued Rotunda common
stock, par value $.001 per share, post-split as per Section 1.4 below.
(a) Assets. It is also agreed to by the parties hereto that by
acquiring the shares of ETFC capital stock, Rotunda will acquire all
rights, title and interest to the assets and property presently owned
by ETFC and represented in ETFC's financial statements or other
schedules provided to Rotunda. Said assets and property may be subject
to certain interests, liens and/or encumbrances which are to be further
described ETFC's financial statements or other schedules provided to
Rotunda.
(b) Valuation. For purposes of the transactions contemplated hereby,
the valuation of the ETFC securities to be exchanged for Rotunda common
stock hereunder will be based upon a multiple of two and one-half (2
1/2) times ETFC's net asset value for its fiscal year ended June 30,
1998, and it is agreed upon by the parties hereto to accept this
valuation.
(c) Reorganization. The parties hereto agree that at the Closing (i)
ETFC shall become a wholly-owned subsidiary of Rotunda subject to the
conditions and provisions of Section 1.6 hereof; (ii) Rotunda shall
change its corporate name to Euro Trade & Forfaiting, Inc.; and (iii)
the necessary steps shall be taken in order to reflect the relocation
of Rotunda's principal place of business to London, England.
SECTION 1.2 Exchange of Shares.
(a) Upon the Closing of this Agreement, Rotunda shall cause to be
issued and held for delivery to the Shareholders of ETFC or their
designees, stock certificates representing an aggregate of 11,000,000
shares (the "Rotunda Shares") of Rotunda common stock (post-split), in
exchange for all the issued and outstanding shares of ETFC capital
stock, which shares shall be delivered to Rotunda at the Closing. It is
agreed that the Rotunda Shares shall be held and not delivered to
Shareholders until the closing of the 4,000,000 share offering
described in Section 1.5 below.
(b) The Rotunda Shares to be issued hereunder shall be authorized but
previously unissued shares of Rotunda common stock. The Rotunda Shares
shall be issued to those persons and in the respective amounts set
forth in Exhibit 1.2 annexed hereto and by this reference made a part
hereof.
(c) All Rotunda Shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 of the Securities Act of 1933, as
amended (the "1933 Act"), and the recipients shall represent in writing
that they are acquiring said shares for investment purposes only and
without the intent to make a further distribution of the Rotunda
Shares. All Rotunda Shares to be issued under the terms of this
Agreement shall be issued pursuant to an exemption from the
registration requirements of the 1933 Act, under Section 4(2) of the
1933 Act and the rules and regulations promulgated thereunder.
Certificates representing the Rotunda Shares to be issued hereunder
shall bear a restrictive legend in substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered for sale, sold or otherwise transferred
except in compliance with the registration provisions of such
Act or pursuant to an exemption from such registration
provisions, the availability of which is to be established to
the satisfaction of the Company.
(d) ETFC and Shareholders acknowledge and agree that the Rotunda
Shares to be issued hereunder shall be issued upon the closing of the
4,000,000 share offering described in Section 1.5 below.
SECTION 1.3 Closing. The closing of this Agreement and the transactions
contemplated hereby (the "Closing") shall take place on the 20th day of
November, 1998 (the "Closing Date"), at a time and place to be mutually agreed
upon by the parties hereto, and shall be subject to the provisions of Article X
of this Agreement. At the Closing:
(a) ETFC shall deliver to Rotunda stock certificates representing 100%
of the issued and outstanding shares of ETFC capital stock, duly
endorsed, so as to make Rotunda the sole holder thereof, free and clear
of all claims and encumbrances;
(b) Rotunda shall deliver to those persons listed in Exhibit 1.2,
stock certificates representing an aggregate of 11,000,000 shares of
Rotunda common stock, which certificates shall bear a standard
restrictive legend in the form customarily used with restricted
securities and as set forth in Section 1.2(c) above;
(c) Rotunda shall deliver an Officer's Certificate as described in
Sections 9.1, 9.2 and 9.4 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth herein
by Rotunda are true and correct as of, or have been fully performed and
complied with by, the Closing Date; and
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(d) ETFC shall deliver an Officer's Certificate as described in
Sections 8.1, 8.2 and 8.4 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth herein
by ETFC and Shareholders are true and correct as of, or have been fully
performed and complied with by, the Closing Date;
SECTION 1.4 Rotunda Special Meeting of Shareholders. In anticipation of this
Agreement, Rotunda has taken all necessary and requisite action to call for and
hold a Special Meeting of Shareholders on November 20, 1998, in order to
transact the following business:
(a) To ratify the prior action by the Rotunda Board of Directors to
effect a reverse stock split of Rotunda's issued and outstanding shares
of common stock on a one (1) share for one hundred (100) shares basis,
effective November 20, 1998; and
(b) To ratify this Agreement and all transactions contemplated hereby;
(c) To ratify the amendment to the Articles of Incorporation to permit
action which may be taken at any annual or special meeting of
shareholders, to be taken by written consent of shareholders having not
less than the minimum number of votes that would be necessary to
authorize or take the action at a meeting of shareholders.
SECTION 1.5 Offering and Sale of Rotunda Common Stock. The parties hereto
agree to cooperate to cause the offering and sale of up to 4,000,000 shares
(post-split) of Rotunda's authorized but previously unissued common stock
pursuant to the provisions of Regulation D, Rule 504 of the 1933 Act. It is
further agreed that ETFC will facilitate the offering and sale and that all
sales will be made outside the United States and to persons not citizens of the
United States.
SECTION 1.6 Consummation of Transaction. If at the Closing, no condition
exists which would permit any of the parties to terminate this Agreement, or a
condition then exists and the party entitled to terminate because of that
condition elects not to do so, then the transactions herein contemplated shall
be consummated upon such date, and then and thereupon, Rotunda shall file any
additional necessary documents that may be required by the State of Utah.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ROTUNDA
Rotunda hereby represents, warrants and agrees that:
SECTION 2.1 Organization, Good Standing and Corporate Power of Rotunda.
Rotunda is a corporation duly organized, validly existing and presently in good
standing under the laws of the State of Utah, is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
such qualification is necessary, and has the corporate power and authority to
own its properties and assets and to transact the business in which it is
engaged. There are no corporations or other entities with respect to which (i)
Rotunda owns any of the outstanding stock or other interest, or (ii) Rotunda may
be deemed to be in control because of factors or relationships other that the
quantity of stock or other interest owned.
SECTION 2.2 Capitalization of Rotunda. Prior to the action to be taken at the
Rotunda Special Meeting of Shareholders as set forth in Section 1.4 above and
the transactions contemplated by this Agreement, the authorized capital stock of
Rotunda consisted of 50,000,000 shares of common stock, par value $.001 per
share, of which 19,522,000 shares were issued and outstanding. Taking into
consideration the effect of the proposed one share for one hundred shares
reverse stock split, the number of shares of common stock issued and outstanding
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shall be approximately 195,220 shares, par value $.001 per share, without giving
effect to the rounding-up of fractional shares resulting from the reverse stock
split, and the shares to be issued pursuant to this Agreement. All shares of
Rotunda common stock currently issued and outstanding have been duly authorized
and validly issued and are fully paid and non-assessable. There are no
preemptive rights, or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights, calls,
agreements or commitments of any character obligating Rotunda to issue any
shares of its capital stock or any security representing the right to acquire,
purchase or otherwise receive any such stock. Shares of Rotunda common stock to
be issued pursuant to this Agreement, when so issued, will be duly authorized,
validly issued, fully paid and non-assessable.
SECTION 2.3 Charter Documents. Certified copies of the Rotunda Articles of
Incorporation and By-Laws, as amended to date, have been or will be delivered to
ETFC prior to the Closing.
SECTION 2.4 Corporate Documents. The most recent Rotunda shareholders' list
and corporate minute books, which have been made available to ETFC, are complete
and accurate as of the date hereof and the corporate minute books contain the
recorded minutes of all corporate meetings of shareholders and directors.
SECTION 2.5 Financial Statements. Rotunda's financial statements for the three
month ended March 31, 1998 and the year ended December 31, 1997, a copy of which
is annexed hereto as Exhibit 2.5 and by this reference made a part hereof, are
true and complete in all material respects, having been prepared in accordance
with generally accepted accounting principles applied on a consistent basis for
the periods covered by such statements, and fairly present, in accordance with
generally accepted accounting principles, the financial condition of Rotunda and
results of its operations for the periods covered thereby. Except as otherwise
disclosed to ETFC in writing and as set forth herein and in Exhibit 2.5, and
other than according to the ordinary and usual course of Rotunda's business
consistent with such practice, (a) Rotunda has not engaged in any material
transaction since the date of its financial statements, and (b) there has not
been any material adverse change in the business operations, assets, properties,
prospects or condition (financial or otherwise) of Rotunda, taken as a whole,
from that reflected in the financial statements referred to in this Section 2.5.
SECTION 2.6 Absence of Certain Changes or Events. Since the date of the
Rotunda financial report attached hereto as Exhibit 2.5 and except as disclosed
otherwise herein, Rotunda has not (i) issued or sold any promissory note, stock,
bond, option or other corporate security of which it was an issuer or other
obligor, (ii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability, absolute or contingent, direct of indirect, (iii)
incurred or suffered to be incurred any liability or obligation other than in
the ordinary and usual course of business, (iv) caused or permitted any lien,
encumbrance or security interest to be created or arise on or in any of its
properties or assets, (v) declared, set aside or made any dividend, payment or
other distribution to any shareholder or purchased or redeemed or agreed to
purchase or redeem any shares of its capital stock (except for the cancellation
of 1,603,038 shares (post-split) as set forth in Section 1.1(b) above), (vi)
reclassified its shares of capital stock, or (vii) entered into any agreement or
transaction except in the ordinary and usual course of business or in connection
with the execution and performance of this Agreement.
SECTION 2.7 Tax Returns and Payments. Rotunda has filed with the appropriate
governmental authority, all tax returns, whether based upon income, sales or
franchise, as required by law to be filed on or before the date of this
Agreement, and Rotunda has paid all taxes to be due on said returns, any
assessments made against Rotunda and all other taxes, fees and similar charges
imposed on Rotunda by any governmental authority. No tax liens have been filed
and no claims are being assessed and no returns are under audit with respect to
any such taxes, fees or other similar charges.
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SECTION 2.8 Contracts. Rotunda is not a party to or bound by any material
contract or commitment, including guaranty whether written or oral, except as
may otherwise be disclosed in Exhibit 2.8, annexed hereto and by this reference
made a part hereof.
SECTION 2.9 Compliance with Law and Government Regulations. Rotunda is in
compliance with and is not in violation of applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Rotunda is not subject to any
order, decree, judgment or other sanction of any court, administrative agency or
other tribunal.
SECTION 2.10 Litigation. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which Rotunda is a party or
which may result in any material adverse change in the business or condition,
financial or otherwise, of Rotunda or in any of its properties or assets, or
which might result in any liability on the part of Rotunda, or which questions
the validity of this Agreement or of any action taken or to be taken pursuant to
or in connection with the provisions of this Agreement and, to the best
knowledge of Rotunda, there is no basis for any such litigation, arbitration,
proceeding or investigation.
SECTION 2.11 Trade Names and Rights. Rotunda does not use any trade xxxx,
service xxxx, trade name, or copyright in its business, nor does it own any
trade marks, trade xxxx registrations or application, trade name, service marks,
copyrights, copyright registrations or application. No person owns any trade
xxxx, trade xxxx registration or application, service xxxx, trade name,
copyright, or copyright registration or application, the use of which is
necessary or contemplated in connection with the operation of Rotunda's
business.
SECTION 2.12 Governmental Consent. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by Rotunda from any
court, governmental or regulatory authority, agency, commission, body or other
governmental entity, in connection with the execution and delivery of this
Agreement by Rotunda or the carrying out and consummation of any transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a material adverse
effect or prevent, materially delay or materially impair the ability of Rotunda
to consummate the transactions contemplated by this Agreement.
SECTION 2.13 Corporate Authority. Rotunda has all requisite corporate power and
authority and has taken all corporate actions necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject (if required by law) only to approval of this Agreement by the holders
of a majority of the outstanding shares of Rotunda common stock. The Rotunda
Board of Directors has unanimously approved this Agreement and all transactions
contemplated hereby. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by Rotunda
with the provisions hereof will not (a) conflict with or result in a breach of
any provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Rotunda under, any of the terms, conditions or
provisions of the Articles of Incorporation or By-Laws of Rotunda, or any note,
bond, mortgage, indenture, license, lease, agreement or any instrument or
obligation to which Rotunda is a party or by which it is bound; or (b) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Rotunda or any of its properties or assets. Assuming due execution and delivery
by the parties hereto, this Agreement is the valid and binding agreement of
Rotunda enforceable against Rotunda in accordance with its respective terms,
except as such enforceability may be limited by applicable bankruptcy laws or
creditors' rights generally or by general principles of equity.
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SECTION 2.14 Full Disclosure. None of the representations and warranties made
by Rotunda herein, or in any exhibit, certificate or memorandum furnished or to
be furnished by Rotunda or on its behalf pursuant hereto, contains or will
contain any untrue statement of material fact, or omits any material fact, the
omission of which would be misleading.
ARTICLE III
COVENANTS OF ROTUNDA
SECTION 3.1 Conduct Prior to the Closing. Rotunda covenants and agrees as to
itself that, after the date hereof and prior to the Closing (unless ETFC shall
otherwise approve in writing, which approval shall not be unreasonably
withheld):
(a) Except within the regular course of business and for the
transactions contemplated by this Agreement, Rotunda will not enter
into any material agreement, contract or commitment, whether written or
oral, or engage in any substantive transaction;
(b) Rotunda will not declare, set aside or pay any dividends or
distributions payable in cash, stock or property, in respect of its
capital stock
(c) Rotunda will not amend its Articles of Incorporation or By-Laws,
except as set forth in Section 1.4 above or except for any amendment
which will not hinder, delay or make more costly to ETFC the
transactions contemplated by this Agreement;
(d) Rotunda will not authorize, issue, sell, purchase or redeem or
repurchase any shares of its capital stock or any options, rights or
other securities convertible, exchangeable or exercisable for any
shares of its capital stock, except as set forth in Section 1.1(b)
above;
(e) Rotunda will comply with all requirements which federal or state
law may impose on it with respect to this Agreement and the
transactions contemplated hereby, and will promptly cooperate with and
furnish written information to ETFC in connection with any such
requirements imposed upon the parties hereto in connection therewith;
(f) Except within the regular course of business, Rotunda will not
incur any indebtedness for money borrowed, issue or sell any debt
securities, incur or suffer to be incurred any liability or obligation
of any nature whatsoever, cause or permit any lien, encumbrance or
security interest to be created or arise on or in any of its properties
or assets, acquire or dispose of fixed assets, change employment terms,
enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for
less than its stated amount or enter into any other transaction, except
to comply with the terms of this Agreement; and
(g) Rotunda shall grant to ETFC and its counsel, accountants and other
representatives, full access during normal business hours during the
period prior to the Closing to all its respective properties, books,
contracts, commitments and records and, during such period, furnish
promptly to ETFC and such representatives all information relating to
Rotunda as ETFC may reasonably request, and shall extend to ETFC the
opportunity to meet with Rotunda's accountants and attorneys to discuss
the financial condition of Rotunda;
SECTION 3.2 Affirmative Covenants. Prior to Closing, Rotunda will do the
following:
(a) Use its best efforts to accomplish all actions necessary to
consummate this Agreement, including satisfaction of all conditions
contained in this Agreement;
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(b) Promptly notify ETFC in writing of any material adverse change in
the financial condition, business, operations or key personnel of
Rotunda, any threatened material litigation or investigation, any
breach of its representations or warranties contained herein, and any
material contract, agreement, license or other agreement which, if in
effect on the date of this Agreement, should have been included in this
Agreement or in an exhibit annexed hereto and made a part hereof;
(c) Reserve, and promptly after the Closing, issue and deliver to
Shareholders and/or their designees, the number of shares of Rotunda
common stock required hereunder;
(d) Upon completion of the offering and sale of the 4,000,000 shares
of common stock as set forth in Section 1.5 above, the Rotunda Board of
Directors will nominate as new directors to its Board those persons to
be designated by ETFC and, contemporaneous with or immediately
thereafter, the current members of the Rotunda Board of Directors will
tender to the Board their respective resignations as directors and/or
officers.; and
(e) Take any and all other necessary and requisite corporate actions
to accomplish the transactions anticipated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ETFC AND SHAREHOLDERS
ETFC and Shareholders hereby represent, warrant and agree that:
SECTION 4.1 Organization, Good Standing and Corporate Power of ETFC. ETFC is a
corporation duly organized, validly existing and presently in good standing
under the laws of the United Kingdom, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged. There
are no corporations or other entities with respect to which (i) ETFC owns any of
the outstanding stock or other interest, or (ii) ETFC may be deemed to be in
control because of factors or relationships other that the quantity of stock or
other interest owned.
SECTION 4.2 Charter Documents. Complete and correct copies of the Articles of
Incorporation and By-Laws of ETFC and all amendments thereto, have been or will
be delivered to Rotunda prior to the Closing.
SECTION 4.3 Financial Statements / Assets and Liabilities. ETFC's financial
statements for the period ended June 30, 1998, a copy of which is annexed hereto
as Exhibit 4.3 and by this reference made a part hereof, are true and complete
in all material respects, having been prepared in accordance with generally
accepted accounting principles applied on a consistent basis for the periods
covered by such statements, and fairly present the financial condition of ETFC
and results of its operations for the periods covered thereby. ETFC has good and
marketable title to all of its assets and property to be acquired by Rotunda
hereunder (by way of Shareholders tendering all of their outstanding shares of
common stock to Rotunda), free and clear of any and all liens, claims and
encumbrances, except as may be otherwise set forth herein, in its financial
statements and in Exhibit 1.1. Except as otherwise disclosed to Rotunda in
writing and as set forth herein and in Exhibit 4.3, and other than according to
the ordinary and usual course of ETFC's business, consistent with such practice,
(a) ETFC has engaged only in its routine daily business since the date of its
financial statements, and (b) there has not been any material adverse change in
the business operations, assets, properties, prospects or condition (financial
or otherwise) of ETFC taken as a whole, from that reflected in the financial
statements referred to in this Section 4.3 or in Exhibit 1.1 annexed hereto.
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SECTION 4.4 Tax Returns and Payments. All tax returns for ETFC (federal,
state, city, county or foreign) which are required by law to be filed on or
before the date of this Agreement, have been duly filed or extended with the
appropriate governmental authority. ETFC has paid all taxes to be due on said
returns, any assessments made against ETFC, and all other taxes, fees and
similar charges imposed on ETFC by any governmental authority (other than those,
the amount or validity of which is being contested in good faith by appropriate
proceedings). No tax liens have been filed and no claims are being assessed with
respect to any such taxes, fees or other similar charges.
SECTION 4.5 Required Authorizations. There have been or will be timely filed,
given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by ETFC or the
consummation by it of the transactions contemplated hereby.
SECTION 4.6 Compliance with Law and Government Regulations. ETFC is in
compliance with all applicable federal, state, local or foreign statutes, laws
and regulations (including without limitation, any applicable building, zoning
or other law, ordinance or regulation) affecting their properties or operation
of their businesses. ETFC is not subject to any order, decree, judgment or other
sanction of any court, administrative agency or other tribunal.
SECTION 4.7 Litigation. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which ETFC is a party or
which may result in any material change in the business or condition, financial
or otherwise, of ETFC or in any of its properties or assets, or which if
determined against ETFC, would have a material adverse effect against ETFC, or
which might result in any liability on the part of ETFC, or which questions the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement, and to the best knowledge
of ETFC, there is no basis for any such litigation, arbitration, proceeding or
investigation.
SECTION 4.8 Patents, Trade Names and Rights. Exhibit 4.8 annexed hereto and by
this reference made a part hereof, contains a complete list of all patents,
trademarks, service marks, trademark, service xxxx and copyright registrations,
applications and licenses with respect to the foregoing owned or held by ETFC.
ETFC has no knowledge of any facts and nothing has come to its attention that
would lead it to believe that ETFC has infringed or misappropriated or are
infringing upon any trademark, copyright, patent or other similar right of any
person. No claim relating thereto is pending or to the knowledge of ETFC is
threatened.
SECTION 4.9 Governmental Consent. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by ETFC from any court,
governmental or regulatory authority, agency, commission, body or other
governmental entity, in connection with the execution and delivery of this
Agreement by ETFC or the carrying out and consummation of any transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a material adverse
effect or prevent, materially delay or materially impair the ability of ETFC to
consummate the transactions contemplated by this Agreement.
SECTION 4.10 Authority. ETFC and its Shareholders representing no less than one
hundred percent (100%) of the issued and outstanding shares of ETFC capital
stock of record, have approved this Agreement and duly authorized the execution
and delivery hereof. ETFC has full power, authority and legal right to enter
into this Agreement on behalf of ETFC and its Shareholders and to consummate the
transactions contemplated hereby, and all corporate action necessary to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby has been duly and validly taken. ETFC
further represents that it has been empowered by Shareholders by powers of
attorney and/or otherwise, to execute this Agreement on behalf of Shareholders.
The execution and delivery of this Agreement, the consummation of the
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transactions contemplated hereby and compliance by ETFC with the provisions
hereof will not (a) conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
ETFC under, any of the terms, conditions or provisions of the Articles of
Incorporation or By-Laws of ETFC, or any note, bond, mortgage, indenture,
license, agreement or any instrument or obligation to which ETFC is party or by
which it is bound; or (b) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to ETFC or any of its properties or assets.
Assuming due execution and delivery by the parties hereto, this Agreement
represents the valid and binding agreement of ETFC enforceable against ETFC in
accordance with its respective term, except as such enforceability may limited
by applicable bankruptcy laws or creditors' rights generally or by general
principles or equity.
SECTION 4.11 Legal Proceedings and History. ETFC and Shareholders hereby
represent that, unless otherwise disclosed herein or by a written attachment
hereto, no officer, director or affiliate of ETFC nor any Shareholder or any
other person receiving a portion or all of the Rotunda Shares to be issued
hereunder, shall have been, within the past five years; a party to any
bankruptcy petition against such person or against any business of which such
person was affiliated; convicted in a criminal proceeding or subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses; subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting their
involvement in any type of business, securities or banking activities; or found
by a court of competent jurisdiction in a civil action, by the Securities
Exchange Commission or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
SECTION 4.12 Ownership of Shares. Shareholders representing 100% of the ETFC
capital stock currently issued and outstanding and which stock is to be
transferred to Rotunda under this Agreement, have full power and authority to
transfer such shares of ETFC capital stock to Rotunda hereunder, and such shares
are free and clear of any liens, charges, mortgages, pledges or encumbrances and
such shares are not subject to any claims as to the ownership thereof, or any
rights, powers or interest therein, by any third party.
SECTION 4.13 Investment Purpose . ETFC and Shareholders represent that the
recipients of the Rotunda Shares hereunder are acquiring the shares for
investment purposes only and acknowledges that the Rotunda Shares issued
hereunder are "restricted securities" and may not be sold, traded or otherwise
transferred without registration under the 1933 Act or exemption therefrom.
SECTION 4.14 Full Disclosure. None of the representations and warranties made
by ETFC or Shareholders herein, or in any exhibit, certificate or memorandum
furnished or to be furnished by ETFC or Shareholders, on their behalf pursuant
hereto, contains or will contain any untrue statement of material fact, or omit
any material fact, the omission of which would be misleading.
ARTICLE V
COVENANTS OF ETFC
SECTION 5.1 Conduct Prior to the Closing. ETFC covenants and agrees that,
after the date hereof and prior to the Closing (unless Rotunda shall otherwise
approve in writing, which approval shall not be unreasonably withheld):
(a) ETFC will not declare, set aside or pay any dividends or
distributions payable in cash, stock or property, in respect of its
capital stock;
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(b) ETFC will not amend its Articles of Incorporation or By-Laws,
except for any amendment which will not hinder, delay or make more
costly to Rotunda the transactions contemplated by this Agreement;
(c) ETFC will comply with all requirements which federal or state law
may impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly cooperate with and furnish
written information to Rotunda in connection with any such requirements
imposed upon the parties hereto in connection therewith;
(d) Except within the regular course of business, ETFC will not incur
any indebtedness for money borrowed, issue or sell any debt securities,
incur or suffer to be incurred any liability or obligation of any
nature whatsoever, cause or permit any lien, encumbrance or security
interest to be created or arise on or in any of its properties or
assets, acquire or dispose of fixed assets, change employment terms,
enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for
less than its stated amount or enter into any other transaction, except
to comply with the terms of this Agreement;
(e) ETFC shall grant to Rotunda and its counsel, accountants and other
representatives, full access during normal business hours during the
period prior to the Closing to all its respective properties, books,
contracts, commitments and records and, during such period, furnish
promptly to Rotunda and such representatives all information relating
to ETFC as Rotunda may reasonably request, and shall extend to Rotunda
the opportunity to meet with ETFC's accountants and attorneys to
discuss the financial condition of ETFC; and
SECTION 5.2 Affirmative Covenants. Prior to Closing, ETFC will do the
following:
(a) Use its best efforts to accomplish all actions necessary to
consummate this Agreement, including satisfaction of all the conditions
contained in this Agreement; and
(b) Promptly notify Rotunda in writing of any materially adverse
change in the financial condition, business, operations or key
personnel of ETFC, any breach of its representations or warranties
contained herein, and any material contract, agreement, license or
other agreement which, if in effect on the date of this Agreement,
should have been included in this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Expenses. Whether or not the transactions contemplated in this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense or as otherwise agreed to herein.
SECTION 6.2 Brokers and Finders. Each of the parties hereto represents, as to
itself, that no agent, broker, investment banker or firm or person is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement,
except as may be otherwise set forth herein or by separate document.
SECTION 6.3 Necessary Actions. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers
and/or directors of Rotunda or ETFC, as the case may be, shall take all such
necessary action.
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SECTION 6.4 Indemnification.
(a) From and after the Closing of this Agreement, ETFC and
Shareholders agree to indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Closing a director or officer of
Rotunda, against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, demands, liabilities, damages
and deficiencies, including interest and penalties, incurred or
suffered in connection with any claim action, suit, proceeding or
investigation, whether civil, criminal or administrative, arising out
of matters existing or occurring prior to the Closing, whether asserted
or claimed prior to, at or after the Closing, which is based in whole
or in part on, or arising in whole or in part out of the fact that such
person is or was a director or officer of Rotunda including, without
limitation, all losses, claims, damages, costs, expenses, liabilities,
judgments or settlement amounts based in whole or in part on, or
arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby to the fullest extent that Rotunda
could have been permitted under applicable state laws and its
certificate of incorporation, by-laws and other agreements in effect on
the date hereof to indemnify such individual.
(b) From and after the Closing of this Agreement, Rotunda agrees to
indemnify, defend and hold harmless each person who is now, or has been
at any time prior to the date of this Agreement, or who becomes prior
to the Closing a director or officer of ETFC, against any costs or
expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, demands, liabilities, damages and deficiencies,
including interest and penalties, incurred or suffered in connection
with any claim action, suit, proceeding or investigation, whether
civil, criminal or administrative, arising out of matters existing or
occurring prior to the Closing, whether asserted or claimed prior to,
at or after the Closing, which is based in whole or in part on, or
arising in whole or in part out of the fact that such person is or was
a director or officer of Rotunda including, without limitation, all
losses, claims, damages, costs, expenses, liabilities, judgments or
settlement amounts based in whole or in part on, or arising in whole or
in part out of, or pertaining to this Agreement or the transactions
contemplated hereby to the fullest extent that ETFC could have been
permitted under applicable state laws and its certificate of
incorporation, by-laws and other agreements in effect on the date
hereof to indemnify such individual.
(c) Any indemnified party wishing to claim indemnification under
subsection (a) or (b) of this Section 6.4, upon leaning of any such
claim, action , suit, proceeding or investigation, shall promptly
notify ETFC if under subsection (a), or Rotunda if under subsection
(b), but failure to so notify the appropriate party shall not relieve
the indemnifying party from any liability which it may have under this
Section 6.4 except to the extent such failure materially prejudices
such party. In the event of any such claim, action, suit, proceeding or
investigation, (i) the indemnifying party shall have the right to
assume the defense thereof and shall not be liable to any such
indemnified party in connection with the defense thereof, (ii) the
indemnified party will cooperate in all respects as requested by the
indemnifying party in the defense of any such matter, and (iii) the
indemnifying party shall not be liable for any settlement effected
without its prior written consent, which consent shall not be
unreasonably withheld; provided, however, that the indemnifying party
shall not have any obligation hereunder to any indemnified party if and
when a court shall ultimately determine, and such determination shall
have become final, that the indemnification of such indemnified party
in the manner contemplated hereby is prohibited by law.
SECTION 6.5 Confidentiality. All parties hereto agree to keep confidential
this Agreement and all information and documents relating to this Agreement
until such time as the Agreement and the transactions contemplated hereunder are
made public by means of an appropriate press release or by any other means
reasonably assured to make such information publicly available.
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ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The respective obligations of each party to this Agreement are subject
to the fulfillment, satisfaction or waiver at or prior to the Closing of each of
the following conditions:
SECTION 7.1 Legal Action. No federal or state court or other governmental
entity of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, preliminary
or permanent injunction or other order that is in effect and restrains, enjoins
or otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an "Order"), and no governmental entity shall have
instituted any proceeding or formally threatened to institute any proceeding
seeking any such Order and such proceeding or threat remains unresolved.
SECTION 7.2 Absence of Termination. The obligations to consummate the
transactions contemplated hereby shall not have been canceled pursuant to
Article X hereof.
SECTION 7.3 Required Approvals. Rotunda and ETFC shall have received all such
approvals, consents, authorizations or modifications as may be required to
permit the performance by Rotunda and ETFC of the respective obligations under
this Agreement, and the consummation of the transactions herein contemplated,
whether from governmental authorities or other persons, and Rotunda and ETFC
shall each have received any and all permits and approvals from any regulatory
authority having jurisdiction required for the lawful consummation of this
Agreement.
SECTION 7.4 Blue Sky Compliance. There shall have been obtained any and all
permits, approvals and consents of the Securities or "Blue Sky" Commissions of
any jurisdictions, and of any other governmental body or agency, which counsel
for Rotunda may reasonably deem necessary or appropriate so that consummation of
the transactions contemplated by this Agreement may be in compliance with all
applicable laws.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF ROTUNDA
All obligations of Rotunda under this Agreement are subject to the
fulfillment and satisfaction by ETFC and Shareholders prior to or at the time of
the Closing, of each of the following conditions, any one or more of which may
be waived by Rotunda.
SECTION 8.1 Representations and Warranties True at the Closing. All
representations and warranties of ETFC and Shareholders contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and, except to the extent such representations and warranties
speak as of an earlier date, as of the time of the Closing as though made on and
as of the Closing, and ETFC shall have delivered to Rotunda a closing
certificate, dated the date of the Closing, to such effect and in the form and
substance satisfactory to Rotunda, and signed, in the case of ETFC, by its
president and secretary.
SECTION 8.2 Performance. Each of the obligations of ETFC and Shareholders to
be performed on or before the Closing pursuant to the terms of this Agreement
shall have been duly performed at such time, and ETFC shall have delivered to
Rotunda a closing certificate, dated the date of the Closing, to such effect and
in form and substance satisfactory to Rotunda.
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SECTION 8.3 Authority. All action required to be taken by, or on the part of
ETFC and Shareholders to authorize the execution, delivery and performance of
this Agreement by ETFC and Shareholders and the consummation of the transactions
contemplated hereby, shall have been duly and validly taken. SECTION 8.4 Absence
of Certain Changes or Events. There shall not have occurred, since the date
hereof, any adverse change in the business, condition, (financial or otherwise),
assets or liabilities of ETFC, or any event or condition of any character
adversely affecting ETFC, and ETFC shall have delivered to Rotunda, a closing
certificate, dated the date of the Closing, to such effect and in form and
substance satisfactory to Rotunda and signed, in the case of ETFC, by its
president and secretary.
SECTION 8.5 Acceptance by ETFC Shareholders. The holders of record as of the
Closing of an aggregate of not less than one hundred percent (100%) of the
issued and outstanding shares of capital stock of ETFC have agreed to exchange
their shares for the Rotunda Shares specified herein.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF ETFC
All obligations of ETFC and Shareholders under this Agreement are
subject to the fulfillment and satisfaction by Rotunda, prior to or at the time
of Closing, of each of the following conditions, any one or more of which may be
waived by ETFC and Shareholders.
SECTION 9.1 Representations and Warranties True at the Closing. All
representations and warranties of Rotunda contained in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and,
except to the extent such representations and warranties speak as of an earlier
date, as of the time of the Closing as though made on and as of the Closing, and
Rotunda shall have delivered to ETFC a certificate, dated the date of the
Closing, to such effect and in the form and substance satisfactory to ETFC and
Shareholders, and signed, in the case of Rotunda, by its president and
secretary.
SECTION 9.2 Performance. Each of the obligations of Rotunda to be performed on
or before the Closing pursuant to the terms of this Agreement shall have been
duly performed at the time of the Closing, and Rotunda shall have delivered to
ETFC a closing certificate, dated the date of the Closing, to such effect and in
form and substance satisfactory to ETFC and Shareholders, and signed, in the
case of Rotunda, by its president and secretary.
SECTION 9.3 Authority. All action required to be taken by, or on the part of
Rotunda, to authorize the execution, delivery and performance of this Agreement
by Rotunda, and the consummation of the transactions contemplated hereby shall
be duly and validly taken.
SECTION 9.4 Absence of Certain Changes or Events. There shall not have
occurred, since the date hereof, any adverse change in the business, condition,
(financial or otherwise), assets or liabilities of Rotunda or any event or
condition of any character adversely affecting Rotunda and Rotunda shall have
delivered to ETFC, a closing certificate, dated the date of the Closing, to such
effect and in form and substance satisfactory to ETFC and Shareholders and
signed, in the case of Rotunda by its president and secretary.
SECTION 9.5 Action by Rotunda Shareholders. Prior to the Closing of this
Agreement, the shareholders of Rotunda shall have approved the reverse stock
split and the amendment to the Rotunda Articles of Incorporation changing the
corporate name as set forth in Section 1.4 above
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ARTICLE X
TERMINATION
SECTION 10.1 Termination. Notwithstanding anything herein or elsewhere to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned an/or rescinded:
(a) By mutual written agreement of all the parties hereto at any time,
whether before or after the approval of this Agreement by the
respective parties;
(b) By the board of directors of Rotunda at any time prior to the
Closing if:
(i) a condition to Rotunda's performance under this Agreement
or a covenant of ETFC and/or Shareholders contained herein
shall not be fulfilled on or before the time of the Closing or
at such other time and date specified for the fulfillment for
such covenant or condition;
(ii) a material default or breach of this Agreement shall be
made by ETFC and/ or Shareholders; or
(iii) the Closing shall not have taken place on or prior to
December 31, 1998.
(c) By the board of directors of ETFC at any time prior to the Closing
if:
(i) a condition to ETFC's and Shareholders' performance under
this Agreement or a covenant of Rotunda contained in this
Agreement shall not be fulfilled on or before the Closing or
at such other time and date specified for the fulfillment of
such covenant or conditions;
(ii) a material default or breach of this Agreement shall be
made by Rotunda; or
(iii) the Closing shall not have taken place on or prior to
December 31, 1998.
(d) By either Rotunda or ETFC at any time within two (2) years from
the Closing Date, if it is discovered or determined that any
representation or warranty set forth in the Agreement is proven to be
false or materially misleading or any obligation to be performed
hereunder shall not be fulfilled within the time and date specified
herein, by the non-offending party serving at least ten (10) days
written notice upon the other party that they intend to terminate the
Agreement and all transactions contemplated herein.
SECTION 10.2 Effect of Termination. If this Agreement is terminated, this
Agreement, except as to Section 11.1 and Section 11.2, shall become void and of
no further effect and there shall be no liability on the part of any party
hereto or any of its respective directors, officers, employees, agents,
shareholders, legal, accounting and financial advisors or other representatives;
provided however, that in the case of a Termination without cause by a party or
a termination pursuant to Sections 10.1(b)(i) or 10.1(c)(i) hereof because of a
prior material default under or a material breach of this Agreement by another
party, the damages which the aggrieved party or parties may recover from the
defaulting party or parties shall in no event exceed the amount of out-of-pocket
costs and expenses actually incurred by such aggravated party or parties in
connection with this Agreement, and no party to this Agreement shall be entitled
to any injunctive relief. It is further agreed to by the parties hereto that
upon the termination of this Agreement pursuant to Section 10.1 above, all
shares of Rotunda common stock (Rotunda Shares) issued hereunder shall be
returned to Rotunda to be cancelled on its stock ledger and, in the event such
Rotunda Shares are not returned to Rotunda, Rotunda will have the absolute right
to immediately proceed with the cancellation of the Rotunda Shares without
having possession thereof.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Cost and Expenses. All costs and expenses incurred in connection
with this Agreement will be paid by the party incurring such expenses. In the
event of any termination of this Agreement pursuant to Section 10.1, subject to
the provisions of Section 10.2, Rotunda and ETFC will each bear their own
respective expenses.
SECTION 11.2 Extension of Time: Waivers. At any time prior to the Closing date:
(a) Rotunda may (i) extend the time for the performance of any of the
obligations or other acts of ETFC and/or Shareholders, (ii) waive any
inaccuracies in the representations and warranties of ETFC and
Shareholders contained herein or in any document delivered pursuant
hereto by ETFC and Shareholders, and (iii) waive compliance with any of
the agreements or conditions contained herein to be performed by ETFC
and Shareholders. Any agreement on the part of Rotunda to any such
extension or waiver shall be valid only if set forth in an instrument,
in writing, signed on behalf of Rotunda;
(b) ETFC may (i) extend the time for the performance of any of the
obligations or other acts of Rotunda, (ii) waive any inaccuracies in
the representations and warranties of Rotunda contained herein or in
any document delivered pursuant hereto by Rotunda and (iii) waive
compliance with any of the agreements or conditions contained herein to
be performed by Rotunda. Any agreement on the part of ETFC and to any
such extension or waiver shall be valid only if set forth in an
instrument, in writing, signed on behalf of ETFC.
SECTION 11.3 Notices. Any notice to any party hereto pursuant to this Agreement
shall be in writing and given by Certified or Registered Mail or by facsimile,
addressed as follows:
Copy to:
Rotunda Oil & Mining, Inc. Xxxxxxx X. Xxxxxxx
000 Xxxx 000 Xxxxx Xxxxxxxx at Law
Xxxx Xxxx Xxxx, Xxxx 00000 1121 East 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Copy to:
Euro Trade & Forfaiting Company Limited Appleton Company Services Limited
0 Xxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxxxxx Xxxx
Xxxxxx X0X 0XX Xxxxxx X0 0Xx
Additional notices are to be given as to each party, at such other
address as should be designated in writing complying as to delivery with the
terms of this Section 11.3. All such notices shall be effective when sent,
addressed as aforesaid.
SECTION 11.4 No Personal Liability. This Agreement shall not create or be
deemed to create any personal liability or obligation on the part of any direct
or indirect shareholder of Rotunda, ETFC, or any of their respective officers,
directors, employees, agents or representative.
SECTION 11.5 Parties in Interest. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and the respective successors and
assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
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SECTION 11.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement shall be deemed to be an original and shall have the full force
and effect of an original executed copy. SECTION 11.7 Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any of the other provisions hereof. If any provisions of this
Agreement, or the application thereof to any person or any circumstance, is
illegal, invalid or unenforceable, (a) a suitable and equitable provision shall
be substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision,
and (b) the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
SECTION 11.8 Headings. The Article and Section headings are provided herein for
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
SECTION 11.9 Governing Law. This Agreement shall be deemed to be made in and in
all respects shall be interpreted, construed and governed by and in accordance
with the law of the State of Utah without regard to the conflict of law
principles thereof. Any action to enforce the provisions of this Agreement shall
be brought in a court of competent jurisdiction in the State of Utah and in on
other place.
SECTION 11.10 Survival of Representations and Warranties. All terms, conditions,
representations and warranties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for in it, shall survive the
Closing and the delivery of the Shares of Rotunda common stock to be issued
hereunder at the Closing, regardless of any investigation made by or on behalf
of any of the parties hereto.
SECTION 11.11 Assignability. This Agreement shall not be assignable by operation
of law or otherwise and any attempted assignment of this Agreement in violation
of this subsection shall be void.
SECTION 11.12 Amendment. This Agreement may be amended with the approval of
Shareholders and the boards of directors of Rotunda and ETFC at any time before
or after approval thereof by shareholders of Rotunda and ETFC, if required; but
after such approval, if required, no amendment shall be made which substantially
and adversely changes the terms hereof. This Agreement may not be amended except
by an instrument, in writing, signed on behalf of each of the parties hereto.
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