8949\1\801146.7
8949\1\801146.7
STOCK PURCHASE AGREEMENT
BY AND AMONG
PLATEAU RESOURCES LIMITED
CANYON HOMESTEADS, INC.,
CACTUS GROUP LLC,
AND
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D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
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DATED AUGUST 1, 2003
8949\1\801146.7
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of
August 1, 2003, by and among Cactus Group LLC, a Colorado limited liability
company ("CGL"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, D. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (each, a "BUYER" and
collectively, the "BUYERS"), Canyon Homesteads, Inc., a Utah corporation (the
"COMPANY"), and Plateau Resources Limited, a Utah corporation (the
"SHAREHOLDER").
RECITALS
A. The Shareholder owns 4,478 shares of the outstanding common stock of the
Company (the "SHARES"), which Shares constitute all of the issued and
outstanding shares of capital stock of the Company.
B. The Buyers, through their wholly owned entity, CGL, desire to acquire
from the Shareholder and the Shareholder desires to sell to the Buyers all of
the Shares, on the terms and subject to the conditions set forth in this
Agreement (the "ACQUISITION").
C. The Board of Directors of the Company and the Shareholder and the
members of CGL shall have approved and adopted this Agreement and the
transactions contemplated hereby.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants in this Agreement, CGL, the Company and the Shareholder (individually,
a "PARTY" and collectively, the "PARTIES") agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
1.1 DEFINITIONS. Capitalized terms used in this Agreement, but not
otherwise defined herein, shall have the meaning set out below:
"ACTION" means any judicial or administrative action, claim, suit,
investigation, hearing, demand or proceeding by or before any Governmental
Authority
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"AGREEMENT" means this Stock Purchase Agreement.
"ASSETS" has the meaning set forth in Section 4.10.
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"CLOSING" has the meaning set forth in Section 2.4.
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"CLOSING DATE" has the meaning set forth in Section 2.7.
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"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"CONTRACTS" has the meaning set forth in Section 4.14.
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"DEED OF TRUST" means that certain deed of trust executed by CGL relating
to the properties and improvements in such form reasonably acceptable to the
Shareholder.
"EFFECTIVE DATE" means August 1, 2003.
"ENVIRONMENT" means soil, land surface or subsurface strata, real property
(excluding buildings, other structures or fixtures thereon), surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins and
wetlands), groundwater, water body sediments, drinking water supply, stream
sediments, plant and animal life and any other environmental medium or natural
resource.
"ENVIRONMENTAL LAW" means any federal, state or local law, including
regulations promulgated thereunder, or common law relating to emissions,
discharges, releases or threatened releases of pollutants, petroleum, petroleum
products, contaminants, chemicals or toxic or hazardous substances or wastes
into the environment, including ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, petroleum, petroleum products, contaminants, chemicals
or toxic or hazardous substances or wastes.
"ENVIRONMENTAL LIABILITY(IES) AND COST(S)" means all Liabilities and losses
incurred (i) to comply with any Environmental Law, (ii) as a result of a Release
of any Hazardous Substance or (iii) as a result of any environmental conditions
present at, created by or arising out of the past or present operations of the
Company and its business through the Effective Date.
"ENVIRONMENTAL PERMITS" mean any permit, registration, filing, approval or
authorization from any Governmental Authority required under, issued pursuant
to, or authorized by any Environmental Law.
"ENVIRONMENTAL REPORT" means the Environmental Assessment Report for
Ticaboo, Utah prepared on behalf of Shareholder by ▇▇▇ ▇. ▇▇▇▇▇ dated July 23,
2003, provided by Shareholder to CGL and Buyers prior to the execution of this
Agreement.
"EXCLUDED ASSETS" means those assets set forth on Exhibit A attached
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hereto.
"EXCLUDED LIABILITIES" means the following Liabilities of the Company,
relating to any period on or prior to the Effective Date: (i) any liabilities or
obligations of the Company with respect to any debt or trade payable (other than
accounts payable or debt of the Company which have been incurred in the Ordinary
Course of Business and are outstanding as of the Effective Date), (ii) any
liabilities or obligations of any officer or employee of the Company, or of the
Shareholder or its Affiliates that provided services to or on behalf of the
Company, (iii) any costs of any such employees, including without limitation any
accrued vacation, sick leave, COBRA obligations, personal time, and any other
prerequisites (including accrued bonuses), (iv) any liabilities or obligations
with respect to worker's compensation claims (v) any Taxes, including any Taxes
resulting from the transactions contemplated hereby, and (vi) the Company's
relationship, contractual or otherwise, with the subtenant at Pier 84, (vii) the
pending litigation between the Company and ▇▇▇▇ ▇▇▇▇▇▇, as further described on
Schedule 4.15 ("▇▇▇▇▇▇ LITIGATION"), and (viii) Company's relationship,
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contractual or otherwise, with Ticaboo Townsite Joint Venture.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means United States generally accepted accounting principles as in
effect on the date hereof.
"GOVERNMENTAL AUTHORITY" means the United States of America, any Indian
tribe, any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, or any court, tribunal, arbitrator or arbitral body.
"GUARANTY AGREEMENT" means the Guaranty Agreement, by and between each
Buyer and the Shareholder, in a form reasonably acceptable to CGL, Buyers and
the Shareholder.
"HAZARDOUS SUBSTANCE" means, collectively, (i) any petroleum or petroleum
products, explosives, radioactive materials, asbestos, urea formaldehyde foam
insulation, and transformers or other substances that contain polychlorinated
biphenyls, (ii) any chemicals or other materials or substances that are defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants," "pollutants" or
words of similar import under any Environmental Law and (iii) any other chemical
or other material or substance, exposure to which is prohibited, limited or
regulated under any Environmental Law.
"INDEBTEDNESS" means, with respect to any Person, any and all obligations
of such Person (i) for borrowed money, (ii) evidenced by notes, bonds,
debentures or similar instruments, (iii) under or relating to letters of credit
(including any obligation to reimburse the letter of credit issuer with respect
to amounts drawn on such instruments), (iv) for the deferred purchase price of
goods or services (other than trade payables or accruals incurred and paid in
the Ordinary Course of Business), (v) under capital leases, (vi) with respect to
bank overdrafts or otherwise reflected as negative cash in financial statements
of such Person, (vii) for deferred compensation, (viii) to pay any accrued
dividends or dividends that have otherwise been declared and not yet paid, and
(ix) in the nature of guarantees of the obligations described in clauses (i)
through (viii) above of any other Person.
"INVESTMENTS" means (i) any share of capital stock, partnership or other
equity interest, evidence of Indebtedness or other security issued by any other
Person, (ii) any loan, advance, prepayment or extension of credit to, or
contribution to the capital of, any other Person, (iii) any acquisition of all
or any part of the business of any other entity or the assets comprising such
business or part thereof, (iv) any commitment or option to make any investment
or (v) any other similar investment.
"KNOWLEDGE" means a Person's actual knowledge after reasonable
investigation, including the knowledge of a particular fact or matter by any
executive officer employed by or serving a Person; provided, however, the
Company's knowledge shall mean the actual knowledge of only ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇.
"LAWS" means all laws, statutes, rules, regulations, codes, injunctions,
judgments, orders, decrees, ruling, interpretations, constitutions, ordinances,
common law or treaties of any federal, state, local, municipal and foreign,
international or multinational Government Authority.
"LIABILITY" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, whether incurred directly or
consequentially and whether due or to become due), including any liability for
Taxes.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the Party's
business, financial condition, operations, results of operations.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PERSON" means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department, agency
or political subdivision thereof).
"PROMISSORY NOTE" means that certain secured promissory note in the
principal amount of $3,003,200.00 payable to the Shareholder in a form
reasonably acceptable to the Shareholder.
"PURCHASE PRICE" has the meaning set forth in Section 2.2.
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"PROPERTY(IES)"means collectively the Real Property and Assets of the
Company.
"REAL PROPERTY" has the meaning set forth in Section 4.10.
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"RELEASE" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any Hazardous Substance into the
Environment that may cause an Environmental Liability and Cost (including the
disposal or abandonment of barrels, containers, tanks or other receptacles
containing or previously containing any Hazardous Substance).
"SCHEDULES" has the meaning set forth in Article 3.
"SECURITY AGREEMENT" means that certain Security Agreement, by and among
the CGL, the Company and the Shareholder in the form reasonably acceptable to
the Shareholder.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance, charge,
claim, equitable interest, restriction on transfer or other security interest,
other than (a) mechanic's, materialmen's, and similar liens, securing payment of
sums not yet due and payable, (b) liens for Taxes not yet due and payable or for
Taxes that the taxpayer is contesting in good faith through appropriate
proceedings and (c) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money as set forth on Schedule
4.14.
"TAX" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, capital gain, intangible, environmental (including taxes under
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
and any obligation to indemnify, assume or succeed to the liability of any other
Person in respect to the foregoing.
"TAX RETURN" means any federal, state, local, or foreign return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
"TITLE COMPANY" means South Eastern Utah Title Company located ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
"TREASURY REGULATION" or "TREAS. REG." means the proposed, temporary, and
final regulations promulgated under the Code.
1.2 Terms denoting the singular only shall include the plural, and vice
versa.
1.3 Unless otherwise stated, a reference to a Recital, Article, Section,
Schedule or Exhibit is a reference to a Recital, Article, Section, Schedule or
Exhibit of this Agreement.
1.4 Section numbers and headings are for convenience of reference only, and
shall not affect the interpretation of this Agreement.
1.5 Reference to any gender includes the other.
1.6 Reference to "including" means including, but not by way of limitation.
1.7 Unless otherwise expressly provided in this Agreement, reference to an
Agreement (including this Agreement), document, or instrument is the same as
amended, modified, novated or replaced from time to time.
1.8 Reference to a statute or other legislative act, by-law, rule,
regulation, or order is to the same as amended, modified or replaced from time
to time and to any rule, regulation or order promulgated pursuant to such law.
ARTICLE 2
PURCHASE AND SALE; INITIAL DELIVERIES; CLOSING
2.1 PURCHASE AND SALE. Upon the basis of the representations and
warranties, for the consideration, and subject to the terms and conditions
hereof, the Shareholder agrees to sell, convey, transfer and deliver to CGL at
the Closing (as defined in Section 2.4 below), and CGL agrees to purchase and
accept from the Shareholder at the Closing, effective as of the Closing Date,
the Shares free and clear of any and all Security Interests.
2.2 PURCHASE PRICE. Subject to the adjustments set forth in Section 2.3,
the aggregate purchase price for the Shares shall be $3,470,000.00 (the
"PURCHASE PRICE"), and shall be payable to the Shareholder as follows:
a. Within five (5) business days following the Effective Date, CGL
shall wire at least one-half of an amount equal to $466,800 (the "Deposit") to
the Title Company. The remainder of the Deposit will be wired to the Title
Company within ten (10) business days following the Effective Date. Title
Company shall place the Deposit in an insured, interest-bearing account. If
prior to Closing, this Agreement is terminated pursuant to Section 11.1(c),
$100,000 of the Deposit shall be transmitted by the Title Company to
Shareholder, with the balance transmitted to CGL. At Closing, the Deposit shall
be released from escrow to the Shareholder pursuant to certain escrow closing
instructions to be delivered by CGL to the Title Company; and
b. At Closing, CGL shall deliver the Promissory Note, dated as of
the Closing Date, to the Shareholder, as well as the Security Agreement and the
Deed of Trust, and each Buyer shall deliver a Guaranty Agreement.
2.3 INTENTIONALLY DELETED.
2.4 TITLE COMMITMENT AND SURVEY.
a. Title Insurance Commitment. The Shareholder has delivered to
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the Buyers and CGL, a commitment (the "TITLE COMMITMENT") from the Title
Company. CGL shall deliver a Lender's title insurance policy to Shareholder.
Buyers and CGL and Shareholder shall share the cost of the Title Commitment and
Lender's title insurance policy equally.
b. Surveys. The Shareholder shall deliver to the Buyers and CGL
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any boundary and improvement surveys of the Property in the Shareholder's or the
Company's possession.
2.5 WATER RIGHTS. The Shareholder has provided the Buyers and CGL all
information it and the Company have in their possession related to sanitary
sewer and other information with respect to the water rights, well permits and
other documentation related to adequacy of water supply for the Property.
2.6 UTILITIES AND POWER. The Shareholder has provided the Buyers and CGL
with all information and documentation it and the Company have in their
possession related to the adequacy of power and utilities to service the
operation of the Property, including without limitation, all information
pertaining to power generators and the like.
2.7 TENANT RELATIONSHIPS. Within ten (10) days following the date hereof,
the Shareholder shall provide the Buyers and CGL with any financial information
of subtenants of the Property within its or the Company's possession. Within ten
(10) days prior to the Closing Date, the Shareholder shall use commercially
reasonable efforts to have the following subtenants execute estoppel
certificates confirming that such subtenant's lease is in full force and effect
and that neither the tenant nor the Company is in default under their applicable
lease: (i) Slick Rock Services, Inc., sublease dated June 1, 2003; (ii) ▇▇▇▇▇▇▇
▇▇▇▇, sublease for Motel Room No. 112 dated March 27, 2001; and (iii) ▇▇▇▇▇
▇▇▇▇▇▇▇, sublease for restaurant and bar dated March 15, 2003. Each of the
foregoing subleases shall also be assigned to the Company as of the date of
Closing.
2.8 CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP in
Denver, Colorado, commencing at 9:00 a.m., local time, or at such other place
and time as is agreed upon by the Parties, on August 12, 2003 or as soon as
practicable thereafter following the satisfaction or waiver of all conditions to
the obligations of the Parties to consummate the transactions contem-plated
hereby (other than conditions with respect to actions the respective Parties
will take at the Closing itself) or such other date as the Parties may mutually
determine (the "CLOSING DATE"). Notwithstanding the actual date of the Closing,
the Closing shall be effective for accounting purposes as of the 11:59 p.m. on
the date immediately preceding the Effective Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDER
The disclosure schedules (the "SCHEDULES") contemplated by this Article 3,
Article 4 and Article 5 will be arranged to correspond to the numbered and
lettered sections contained in Article 3, Article 4 and Article 5 and will be
delivered concurrently with the execution of this Agreement.
As a material inducement to the Buyers and CGL to enter into this Agreement
and consummate the transactions contemplated hereby, the Shareholder represents
and warrants to the Buyers and CGL as follows:
3.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Shareholder
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Utah and has the corporate power to own its property and to
carry on its business as now being conducted. The Shareholder is duly qualified
and/or licensed, as may be required, and in good standing in each of the
jurisdictions in which the nature of the business conducted by it or the
character of the property owned, leased or used by it makes such qualification
and/or licensing necessary, except in such jurisdictions where the failure to be
so qualified and/or licensed would not individually or in the aggregate have a
Material Adverse Effect on the Company or the Shareholder.
3.2 NO LIENS ON SHARES. The Shareholder is the beneficial and record owner
of all of the Shares free and clear of any Security Interests other than the
rights and obligations arising under this Agreement except as disclosed on
Schedule 3.2. No Share is subject to any outstanding option, warrant, call, or
similar right of any other Person to acquire the same, and no Share is subject
to any restriction on transfer thereof, except for restrictions related to
registration of the Shares under the Securities Act of 1933, as amended (the
"SECURITIES ACT"). The Shareholder has full power and authority to convey the
Shares, free and clear of any Security Interests. Upon Closing, CGL will hold
the entire equity interest in the Company, free and clear of all Security
Interests, other than those Security Interests to be created by the transactions
contemplated by this Agreement or Security Interests otherwise created by CGL.
3.3 AUTHORIZATION OF TRANSACTION. The Shareholder has the full limited
liability company power and authority to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite limited liability company action of the Shareholder. This Agreement
has been duly and validly executed and delivered by the Shareholder and
constitutes the valid and legally binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms and conditions,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
3.4 NONCONTRAVENTION. Except for filings, permits, authorizations, consents
and approvals, all of which are set forth on Schedule 3.4, neither the execution
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and delivery of this Agreement by the Shareholder nor the consummation by the
Shareholder of the transactions contemplated herein nor compliance by the
Shareholder with any of the provisions hereof will (i) conflict with or result
in any breach of the articles of incorporation or bylaws of the Shareholder,
(ii) result in a violation or 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 termination, cancellation of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Security Interest upon any
of the properties or assets of the Shareholder, or require the notice to any
Person under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, contract, lease, agreement or other
instrument or obligation of any kind to which the Shareholder is a party or by
which the Shareholder's properties or assets, may be bound or (iii) subject to
compliance with applicable Utah corporate laws, the Securities Act and
applicable "blue sky" laws, violate Laws applicable to the Shareholder or any of
the Shareholder's properties or assets. Except as set forth on Schedule 3.4, the
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Shareholder is not required by applicable Laws or other obligations to give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any Governmental Authority or other Person in order for the
consummation by the Parties of the transactions contemplated herein.
3.5 CLAIMS AND PROCEEDINGS. Except as set forth on Schedule 3.5, there are
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no Actions pending or, to the Shareholder's Knowledge, threatened against the
Shareholder that would reasonably be expected to have a Material Adverse Effect
on the Company or the Shareholder, or that question 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 nor, to the Shareholder's Knowledge, is
there any fact (past or present), situation, circumstance, status, condition,
activity , practice, plan occurrence, event, incident, action, failure to act or
transaction that could reasonably be expected to form the basis of an Action.
The Shareholder is not subject to any order, judgment, writ, injunction or
decree of any Governmental Authority which, individually or in the aggregate,
has a Material Adverse Effect on Shareholder.
3.6 BROKER'S FEES. Except as set forth on Schedule 3.6, the Shareholder has
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no Liability to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which CGL could
become liable.
3.7 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of Shareholder in respect of the Shares.
3.8 DISCLOSURE. The representations and warranties contained in this
Article 3 (including the Schedules to this Agreement and any other schedules and
exhibits required to be delivered by the Shareholder to the Buyers and CGL
pursuant to this Agreement) and any certificate furnished or to be furnished by
the Shareholder to the Buyers and CGL hereunder do not contain and will not
contain any untrue statement of material fact or omit to state any fact
necessary in order to make the statements and information contained in this
Section 3 not misleading. To the Shareholder's Knowledge, there is no material
fact relating to the Shareholder (other than general economic or industry
conditions) which may have a Material Adverse Effect on the Company or the
Shareholder or materially effect the ability of the Shareholder to perform any
of its material obligations hereunder which has not been disclosed in writing in
this Agreement to the Buyers or CGL by the Shareholder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
As a material inducement to the Buyers and CGL to enter into this Agreement
and consummate the transactions contemplated hereby, the Company represents and
warrants to the Buyers and CGL as follows:
4.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah and has the corporate power to own its property and to
carry on its business as now being conducted. The Company is duly qualified
and/or licensed, as may be required, and in good standing in each of the
jurisdictions in which the nature of the business conducted by it or the
character of the property owned, leased or used by it makes such qualification
and/or licensing necessary, except in such jurisdictions where the failure to be
so qualified and/or licensed would not individually or in the aggregate have a
Material Adverse Effect on the Company.
4.2 CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of the Company consists of 20,000 shares of common stock, no par
value, of which 4,478 are issued and outstanding. This 4,478 issued and
outstanding shares of common stock consist of all the Shares and constitute all
of the issued and outstanding shares of capital stock of the Company. The Shares
are held beneficially and of record by the Shareholder. No shares of common
stock are held in the treasury of the Company. The Shares have been duly
authorized, validly issued, are fully paid and nonassessable and free of
preemptive rights. None of the Shares were issued in violation of the Securities
Act or applicable "blue sky" laws. There are no outstanding options, warrants or
other rights to subscribe for, purchase or acquire from the Company any capital
stock of the Company or securities convertible into or exchangeable for capital
stock of the Company. Immediately following the Closing, CGL will own the entire
ownership interest of the Company.
4.3 AUTHORIZATION OF TRANSACTION. The Company has the full corporate power
and authority to execute, deliver and perform this Agreement and to carry out
the transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action of the
Company. This Agreement has been duly and validly executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms and conditions,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
4.4 NONCONTRAVENTION. Except for filings, permits, authorizations, consents
and approvals, all of which are set forth on Schedule 4.4, neither the execution
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and delivery of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated herein nor compliance by the Company
with any of the provisions hereof will (i) conflict with or result in any breach
of the articles of incorporation or bylaws of the Company, (ii) result in a
violation or 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 termination, cancellation of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any Security Interest upon any of the Properties of
the Company or require the notice to any Person under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, Contracts, lease, agreement or other instrument or obligation of any
kind to which the Company is a party or by which the Company's Properties, may
be bound, or (iii) subject to compliance with applicable Utah corporate laws,
the Securities Act and applicable "blue sky" laws, violate Laws applicable to
the Company or any of the Company's properties or assets, other than any such
event described in items (i), (ii) or (iii) which would not (x) prevent the
consummation of the transactions contemplated hereby or (y) have a Material
Adverse Effect on the Company. Except as set forth on Schedule 4.4, the Company
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is not required by applicable Laws or other obligations to give any notice to,
make any filing with, or obtain any authorization, consent or approval of any
Governmental Authority or other Person in order for the consummation by the
Parties of the transactions contemplated herein.
4.5 REVENUE AND OPERATING COST SUMMARIES. Attached hereto as Schedule 4.5
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are the Company's monthly revenue and operating cost summaries covering the
period from January 1, 2000 to June 30, 2003 (collectively, the "Revenue
Summaries"). The Revenue Summaries have been prepared consistent with the books
and records of the Company and the Shareholder and are correct and complete in
all material respects, present fairly the financial condition of the Company as
of such dates and the results of operations of the Company for such periods.
4.6 SUBSEQUENT EVENTS; CORPORATE TRANSACTIONS. Except as set forth on
Schedule 4.6, since June 30, 2003, the Company has conducted its business in the
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Ordinary Course of Business and has not (a) suffered a Material Adverse Effect;
(b) incurred any Liabilities that would reasonably be expected to have a
Material Adverse Effect on the Company; (c) incurred any Indebtedness or become
the guarantor or otherwise liable for any Indebtedness of any Person, (d)
suffered any change in its relationship with any of the suppliers, customers,
distributors, lessors, licensors, licensees or other third parties which would
reasonably be expected to have a Material Adverse Effect on the Company; (e)
waived any claims or rights of material value; (f) sold, leased, licensed or
otherwise disposed of any of its Property, other than in the Ordinary Course of
Business; (g) amended, modified or terminated any material contract to which it
is or was a party; (h) suffered any creation or imposition of any Security
Interest upon any of the Company's Property or suffered any occurrence, event,
incident, action, omission or transaction which could reasonably be expected to
materially affect the ability of the Company to hold its Property free and clear
of all Security Interests, (i) incurred any capital expenditure (or series of
related capital expenditures) involving more than $25,000 in the aggregate, (j)
incurred any Investment in, loan to or any acquisition of the securities or
assets of any other Person which exceeds $25,000, (k) permitted any delay or
postponement of accounts payable or any other Liabilities outside the Ordinary
Course of Business, (l) declared any dividend or distribution (whether in case
or in kind) or repurchase, redemption or retirement of any securities of the
Company, (m) suffered any damage, destruction or loss (whether covered by
insurance) to the Property of the Company, which damage, destruction or loss
singly or in the aggregate exceeds $25,000, (n) entered into any agreement or
transaction with an Affiliate of the Company or (o) committed pursuant to a
legally binding agreement to do any of the things set forth above.
4.7 LEGAL COMPLIANCE. Except as set forth on Schedule 4.7, to the Company's
------------
knowledge, the Company is in compliance with all applicable Laws currently in
effect, except where non-compliance would not reasonably be expected to have a
Material Adverse Effect on the Company. The Company has received no notices of
any noncompliance with any applicable Laws.
4.8 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no Liabilities
except for (i) Liabilities reflected on the Revenue Summaries, or any related
balance sheets provided by the Shareholder to the Buyers and CGL, (ii)
Liabilities under Contracts listed on Schedule 4.14, (iii) Liabilities in
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connection with Actions disclosed on Schedule 4.15. (none of which have had or
-------------
could reasonably be expected to have a Material Adverse Effect on the Company)
or (iv) Liabilities which have arisen since the date of the Revenue Summaries in
the Ordinary Course of the Business.
4.9 TAX MATTERS.
a. The Company's Tax Returns are filed on a consolidated basis with
its parent companies. To the extent of the Company's information, all such Tax
Returns were correct and complete in all material respects. All Taxes owed by
the Company shown on any Tax Return have been paid in a timely fashion. The
Company currently is not the beneficiary of any extension of time within which
to file any Tax Return. The Company has not received written notice from an
authority in a jurisdiction where the Company does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax.
b. The Company has withheld and paid all material Taxes required to
have been withheld and paid in connection with amounts paid or owed to any
independent contractor, creditor, shareholder, or other third party.
c. There is no dispute or claim concerning any Tax Liability of the
Company either (i) claimed or raised by any authority in writing or (ii) as to
which the Company has Knowledge.
d. The Company has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.
e. The Company has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii).
f. The Company does not have any Liability for the Taxes of any Person
(other than the Company) under Treas. Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
4.10 PROPERTIES/ASSETS.
a. Attached hereto as Schedule 4.10(a) is a legal description of all of
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the Company's interests in real property (including, without limitation,
leasehold interests) used or occupied by it in the conduct of the business, as
well as a list reflecting the Company's good faith understanding of all other
related real property interests (the "REAL PROPERTY"). Except as expressly set
forth on Schedule 4.10(a)the Title Commitment, or applicable zoning, land use,
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or similar restrictions, such Real Property is free and clear of Security
Interests and is not subject to any rights of way, building use restrictions,
exceptions, variances or limitations which interfere with the use of such Real
Property in the conduct of the business. All Real Property leases used in the
conduct of the business are described in Schedule 4.10(a), are in full force and
----------------
effect, the Company holds a valid and existing leasehold interest under each of
the leases for the terms set forth on such Schedule and any and all rent
payments owing under the leases have been paid to date, except as expressly set
forth on Schedule 4.10(a). The Company has not received written notice of any
-----------------
default under the leases and the Company is not in default under any of the
leases. No person has the right to terminate or accelerate performance under or
otherwise modify (including upon the giving notice or the passage of time) any
of such leases, except in accordance with the provisions thereof. The Company
has provided CGL with true and correct copies of all the Real Property leases
listed on Schedule 4.10(a), including any amendments or modifications thereto.
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b. Attached hereto as Schedule 4.10(b) is a list containing a good
----------------
faith estimate description of each of the Company's assets, tangible and
intangible, owned or leased, having a value exceeding $10,000, located on its
premises, used in the conduct of the Company's business, other than the Real
Property (the "ASSETS"). Schedule 4.10(b)is a good faith estimate of other
-----------------
assets of the Company owned as of the Effective Date (other than the Assets).
All Assets are conveyed by Shareholder "AS IS, WHERE IS", and without warranty
of any nature from the Shareholder or Company. The Company has good title to, or
a valid leasehold interest or related rights in, all of the Assets free and
clear of all Security Interests, except for (a) minor imperfections of title and
encumbrances that do not materially detract from or materially interfere with
the present use or value of such assets; and (b) Security Interests disclosed on
Schedule 4.14.
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4.11 SUBSIDIARIES AND INVESTMENTS. The Company does not have and has never
had any Subsidiaries. Except as set forth on Schedule 4.11, the Company does not
-------------
have any Investments.
4.12 LICENSES AND PERMITS. The Company has the governmental permits,
licenses and authorizations set forth on Schedule 4.12. Such permits, licenses
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and authorizations are in full force and effect.
4.13 INSURANCE. Attached hereto as Schedule 4.13 is a list and brief
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description of all policies of fire, casualty, liability, property or other
forms of insurance and all fidelity bonds held by or applicable to the Company,
and as amended or modified to date. The Company is not in default with respect
to its obligations under any of such insurance policies or bonding arrangements
and the Company has not received any notification of cancellation or
modification of any of such insurance policies or bonding arrangements nor is
any claim outstanding which could be expected to cause a material increase in
the Company's insurance rates. The consummation of the transactions contemplated
by this Agreement will not result in the termination of such insurance policies.
Schedule 4.13 sets forth a description of any self-insurance
--------------
arrangements maintained by the Company.
4.14 CONTRACTS. Schedule 4.14 contains a list of all written or oral
--------------
contracts, commitments, leases, and other agreements (including, without
limitation, promissory notes, loan agreements, and other evidences of
indebtedness, guarantees, agreements with distributors, suppliers, dealers,
franchisers and customers, and service agreements) to which the Company is a
party or by which the Company or its properties are bound, including all
contracts (a) concerning a partnership or joint venture, (b) concerning
noncompetition or otherwise creating or proposing to create any restrictions on
the Company's ability to engage in any business or to operate in any
geographical area, (c) regarding an agreement between the Company and any of its
Affiliates, (d) concerning any profit sharing, option, purchase or any other
similar plan permitting the acquisition of capital stock in the Company,
deferred compensation, severance or other similar plan or arrangement for the
benefit of its current or former directors, officers or employees, (e) regarding
any employment agreement or consulting agreement or providing severance or
retirement benefits, (f) pursuant to which the consequences of a default or
termination could have a Material Adverse Effect on the Company, (g) which are
service contracts and equipment leases used in connection with the operation and
maintenance of the Property and/or (h) regarding any personal guarantees of the
foregoing (collectively, the "CONTRACTS"). Except as set forth on Schedule
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4.14, each Contract is legal, valid, binding, enforceable, and in full force and
----
effect, and the Company is not in material breach or default, and, to the
Company's Knowledge, the other party to the Contract is not in material breach
or default of and no event has occurred which, with notice or lapse of time
would constitute a material breach or default, or permit termination,
modification, or acceleration, under the Contract.
4.15 CLAIMS AND PROCEEDINGS. Except as set forth on Schedule 4.15, there
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are no Actions pending or, to the Company's Knowledge, threatened against the
Company. To the Company's Knowledge there are no facts (past or present),
situations, circumstances, conditions, activities, omissions, practices, plans,
occurrences, events or transactions that could reasonably be expected to be the
basis for an Action. The Company is not subject to any order, judgment, writ,
injunction or decree of any Governmental Authority which would have a Material
Adverse Effect on the Company.
4.16 EMPLOYEES AND LABOR MATTERS. The Company has no employees.
4.17 ENVIRONMENTAL MATTERS. Except as set forth in the Environmental
Report, the Company has materially complied and is in material compliance with
all Environmental Laws. There are no Actions pending or, to the Company's
Knowledge, threatened against the Company in respect of (i) noncompliance by the
Company with any Environmental Laws, (ii) the Release into the Environment of
any Hazardous Substance by the Company or (iii) the handling, storage, use,
transportation or disposal of any Hazardous Substance by the Company. The
Company has obtained and complied, and is in compliance, with all Environmental
Permits. The Company has not received any written notice, report or other
written information regarding any actual or alleged violation of Environmental
Laws or any Liabilities or potential Liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) thereunder, including any investigatory,
remedial or corrective obligations, relating to the Company or any of its
facilities, arising under Environmental Laws. Except as set forth on Schedule
--------
4.17 or the Environmental Report, the Company has not treated, stored, disposed
----
of, arranged for or permitted the presence, disposal of, transport, handling or
Release of any Hazardous Substance, or owned, leased or operated any property or
facility in a manner that has given or would give rise to Environmental
Liabilities and Costs, including any Liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages or
attorneys' fees, pursuant to any Environmental Laws. Except as set forth on
Schedule 4.17 or the Environmental Report, none of the Property is contaminated
--------------
by any Hazardous Substance. The Company has not, either expressly or by
operation of law, assumed, undertaken or otherwise become subject to any
Liability, including any obligation for corrective or remedial action, of any
other Person relating to Environmental Laws. To the Knowledge of the Company,
no facts, events or conditions relating to the past or present facilities,
properties or operations of the Company (or its predecessors or Affiliates
insofar as they affect the Company and the Assets) are reasonably likely to
prevent, hinder or limit continued compliance with Environmental Laws or give
rise to any investigatory, remedial or corrective obligations pursuant to
Environmental Laws.
4.18 AFFILIATE TRANSACTIONS. Except as set forth on Schedule 4.18 (the
-------------
"AFFILIATE TRANSACTIONS"), the Company is not a party to or bound by any
contract, commitment or understanding with any of its directors, officers, or
any other Affiliates of the Company, and none of such directors, officers,
Affiliates or other Persons owns or otherwise has any rights to or interests in
any asset, tangible or intangible, which constitutes a part of the Property or
is used in or related to the Company's business.
4.19 BROKER'S FEES. Except as set forth on Schedule 4.19, the Company does
-------------
not have any Liability to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
CGL could become liable.
4.20 NO ILLEGAL PAYMENTS, ETC. Neither the Company nor any of its
Affiliates, directors, officers, employees or agents has directly or indirectly
given or agreed to give any illegal gift, contribution, payment or similar
benefit to any supplier, customer, governmental official or employee or other
Person who was, is or may be in a position to help or hinder the Company or
assist in connection with any actual or proposed transaction, or made or agreed
to make any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other Person, to any candidate for federal, state,
local or foreign public office (i) which could reasonably be expected to subject
the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding or (ii) the non-continuation of which has had or could
reasonably be expected to have a Material Adverse Effect on the Company.
4.21 BOOKS AND RECORDS. The books, company records and financial records of
the Company are complete and correct in all material respects and have been
maintained in accordance with the Company's past business practices and Laws.
The Company has provided the Buyers and CGL with true and correct copies of the
Company's books, records and financial records.
4.22 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of the Company in respect of the Company, its Property,
Liabilities, or the Shares.
4.23 DISCLOSURE. The representations and warranties contained in this
Article 4 (including the Schedules to this Agreement and any other schedules and
exhibits required to be delivered by the Company to the Buyers or CGL pursuant
to this Agreement) and any certificate furnished or to be furnished by the
Company to the Buyers or CGL hereunder do not contain and will not contain any
untrue statement of material fact or omit to state any fact necessary in order
to make the statements and information contained in this Article 4 not
misleading. There is no material fact relating to the Company which may have a
Material Adverse Effect on the Company or materially effect the ability of the
Company to perform any of its material obligations hereunder which has not been
disclosed in writing in this Agreement to the Buyers or CGL by the Company.
ARTICLE 5
CGL'S REPRESENTATIONS AND WARRANTIES
As a material inducement to the Shareholder and the Company to enter into
this Agreement and consummate the transactions contemplated hereby, the Company
and each Buyers jointly and severally represent and warrant to the Company and
the Shareholder as follows.
5.1 ORGANIZATION. CGL is a limited liability company duly organized,
validly existing and in good standing under the laws of Colorado. CGL is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction, in which the nature of the business conducted by it or the
character of the property owned, leased or used by it makes such qualified
and/or licensing necessary, except in such jurisdiction where the failure to be
so qualified and/or licensed would not individually or in the aggregate have a
Material Adverse Effect on CGL.
5.2 AUTHORIZATION OF TRANSACTION. CGL has the full limited liability
company power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, by CGL
has been duly and validly authorized by all requisite limited liability company
action. This Agreement constitutes the valid and legally binding obligation of
CGL and the Buyers enforceable against them in accordance with its terms and
conditions, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
5.3 NONCONTRAVENTION. Except for filings, permits, authorizations, consents
and approvals, all of which are set forth on Schedule 5.3, neither the execution
------------
and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any Governmental Authority to which CGL or the Buyers are subject or any
provision of the certificate of formation or operating agreement of CGL or (b)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice to any Person under any agreement, contract,
lease, license, instrument, or other arrangement to which CGL or any Buyer is a
party or by which they are bound or to which any of their assets is subject,
except in each case for such violations, conflicts, breaches or defaults that do
not have a Material Adverse Effect on CGL or any Buyer. Neither CGL nor any
Buyer is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority in order for
the Parties to consummate the transactions contemplated by this Agreement.
5.4 BROKERS' FEES. Neither CGL nor any Buyer has any Liability to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Shareholder could
become liable.
5.5 LITIGATION. There are no Actions pending or, to CGL's or any Buyer's
Knowledge, threatened against or affecting CGL or any Buyer that would
reasonably be expected to have a Material Adverse Effect on CGL's or any Buyer's
performance under this Agreement or the consummation of the transactions
contemplated hereby. There are no injunctions, decrees or unsatisfied judgments
outstanding against or related to CGL or any Buyer that could interfere with
CGL's or any Buyer's ability to consummate the transactions contemplated by this
Agreement.
5.6 INVESTIGATION BY BUYERS. Prior to the Closing, the Buyers and CGL shall
have directly and through their representatives, at the Buyers' sole expense, in
cooperation with the management of the Company, made such investigation of the
Company as the Buyers and CGL deemed necessary or advisable, and each Buyer
acknowledges that he or she is and shall be relying solely on his or her own
investigation and the representations and warranties contained in this Agreement
and the Schedules in deciding on the value of the Company and deciding to
proceed with the purchase of the Shares. Further, each Buyer expressly
represents that he or she (i) prior to the Closing Date, has had the opportunity
to have exercised due diligence in his or her examination of the affairs of the
business of the Company, and (ii) has not relied on any representation or
warranty by the Shareholder or the Company, or its respective agents, officers,
or employees, in entering into this Agreement, except as may be expressly stated
or provided herein and the Schedules.
5.7 HELD FOR INVESTMENT. The Buyers, through CGL, are acquiring the Shares
pursuant to this Agreement for investment only and not with a view to the
distribution thereof in violation of federal or state securities laws. CGL and
the Buyers understand that the Shares have not been registered under the
Securities Act, or under any applicable "blue sky" laws and must be held
indefinitely unless such securities are subsequently registered under the
Securities Act and such state laws or an exemption from such registration is
available.
5.8 FUNDS. At the Closing, the Buyers or CGL will have, sufficient funds on
hand or available pursuant to unconditional commitments to pay the portion of
the Purchase Price set forth in Section 2.2(a).
5.9 DISCLOSURE. The representations and warranties contained in this
Article 5 (including the Schedules to this Agreement and any other schedules and
exhibits required to be delivered by the Buyers and CGL to the Shareholder or
the Company pursuant to this Agreement) and any certificate furnished or to be
furnished by the Buyers and CGL to the Shareholder and the Company hereunder do
not contain and will not contain any untrue statement of material fact or omit
to state any fact necessary in order to make the statements and information
contained in this Article 5 not misleading. There is no material fact relating
to the Buyers or CGL which may have a Material Adverse Effect on the Buyers or
CGL or materially effect the ability of the Buyers or CGL to perform any of
their material obligations hereunder which have not been disclosed in writing in
this Agreement to the Shareholder and the Company by the Buyers or CGL.
ARTICLE 6
PRE-CLOSING COVENANTS
6.1 The Parties agree as follows with respect to the period between the
date hereof and the Closing Date:
a. GENERAL. Each of the Parties will use its commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Article 8).
b. NOTICES AND CONSENTS. Each of the Parties will give any notices to
third parties, and will use its reasonable best efforts to obtain any third
party consents, that the other Party may request and as required pursuant to
Schedule 8.1(f).
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c. REGULATORY MATTERS AND APPROVALS. The Parties shall prepare and
submit for filing any and all applications, filings, and registrations with, and
notifications to, all Governmental Authorities required on the part of the
Company or the Shareholder for the Acquisition to be consummated as contemplated
by this Agreement. Thereafter, all Parties shall pursue all such applications,
filings, registrations, and notifications diligently and in good faith, and
shall file such supplements, amendments, and additional information in
connection therewith as may be reasonably necessary for the Acquisition to be
consummated at the Closing Date.
6.2 PRESERVATION AND OPERATION OF THE BUSINESS. At all times prior to
the Closing, the Company and the Shareholder will use commercially reasonable
efforts to keep the Company, its business and Property substantially intact and
operate the Company in the Ordinary Course of the Business, except for actions
required or permitted to be taken pursuant to Article 6.
6.3 TRANSFER OF SHARES. The Shareholder will not sell or otherwise
dispose of any of the Shares. The Shareholder will not grant any rights to
purchase or obtain (including upon conversion, exchange or exercise) or
otherwise control any Shares.
6.4 ACCESS TO INFORMATION. Upon reasonable notice and subject to
applicable laws relating to the exchange of information, the Company and
the Shareholder shall afford to CGL and CGL Principals and their authorized
representatives, access during normal business hours during the period
prior to the Closing Date, to all of the Company's Properties, books,
Contracts, commitments and records for the purpose of updating any review
of such items performed prior to the date of this Agreement and, during
such period, the Company and the Shareholder shall make available all other
information concerning its business, Properties and personnel as CGL or the
CGL principals may reasonably request.
6.5 PIER 84 SUBLEASES. Prior to Closing, the Shareholder shall obtain
from principals of Pier Marine Inc., d/b/a Pier 84 ("PIER 84") a written
commitment to cooperate in an operational transition of the boat service,
boat storage services and the convenience store operations to CGL pursuant
to the terms and conditions of that certain letter agreement dated July 29,
2003 from ▇▇▇ ▇▇▇▇▇▇ to Pier 84 (the "LETTER AGREEMENT"). In addition, the
Shareholder shall obtain written Lease Termination Agreements for the
following subleases: oral lease agreement pertaining to the Model Home,
that certain written sublease dated April 1, 2001 with respect to a portion
of the Ticaboo Boat Storage Facility, that certain sublease dated April 1,
2000 with respect to a portion of the Ticaboo Boat Center, and that certain
sublease dated April 1, 2001 with respect to a portion of the Leapin'
Lizard Convenience Store. In the event that lease payments for the month of
August, 2003 (C-Store) and August/September, 2003 (Boat Service and Boat
Storage) are not timely paid to the Company in full as required by the
Letter Agreement, such amounts shall be offset against the next principal
installment owing under the Promissory Note.
6.6 ENVIRONMENTAL REPORT/REMEDIATION. The Environmental Report
identifies a "release of diesel fuel at the powerhouse." Within thirty (30)
days following the Closing Date, the Shareholder shall (i) remediate this
release by removing contaminated soils and disposing of them in accordance
with applicable legal requirements, and (ii) procure a third party review
and field inspection of the remediation by the author of the Environmental
Report prior to backfilling the area where the contaminated soils have been
removed (collectively, the "REMEDIATION WORK"). In the event the
Shareholder fails to perform the foregoing Remediation Work within the
thirty (30) period set forth above, CLG may obtain a reasonable estimate to
have such Remediation Work performed by a third party consultant acceptable
to CGL and the cost thereof shall be offset against the next principal
installment owing under the Promissory Note.
ARTICLE 7
POST-CLOSING COVENANT
7.1 FURTHER ASSURANCE. From time to time after the Closing, the Shareholder
will timely execute and deliver to CGL such instruments of sale, transfer,
conveyance, assignment and delivery, and such consents, assurances, powers of
attorney and other instruments, as may be reasonably requested by CGL or its
counsel in order to vest in CGL all right, title and interest in and to the
Shares and otherwise in order to carry out the purpose and intent of this
Agreement. In addition, the Parties agree that if, at any time after the
Closing, any further action is necessary or desirable to carry out the purposes
of this Agreement, each of the Parties will take such further action and execute
and deliver any document and instrument as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Article 10).
7.2 SALE PROCEEDS. CGL agrees to pay, and shall cause the Company to pay,
to the Shareholder the net sale proceeds from the Company's sale of all single
family home lots ("SFH Lots") and mobile home lots ("MH Lots") included in the
Real Property, until and to the extent that such sales (utilizing the gross
sales proceeds of each sale) equal an aggregate $210,000.00 ("Threshold
Amount"), provided that any related sales expenses are reasonable and customary.
CGL and the Buyers shall notify, and shall cause the Company to notify, the
Shareholder when any SFH Lots or MH Lots are sold, and transmit the applicable
net sales proceeds to the Shareholder promptly thereafter. After the Company has
satisfied the Threshold Amount, CGL and the Buyers agree that 75% of the net
proceeds of any sales of SFH Lots or MH Lots beyond such Threshold Amount shall
be applied directly to a reduction of the principal amount outstanding under the
Promissory Note until such Promissory Note is fully repaid. If CGL or Buyers
transfer the Capital Stock of the Company or substantially all of the assets of
the Company to a third party, CGL and the Buyer shall pay to the Shareholder any
unpaid balance of the Threshold Amount.
7.3 TICABOO LODGE CREDITS. CGL hereby grants, and shall cause the Company
to grant, to Shareholder and its designees 1,000 room night credits at the
Ticaboo Lodge from the Effective Date through the date that the Promissory Note
is fully repaid, each of which credits shall be valued at 50% of the standard
room rate on the night which such credit is used, but in no event greater than
$50.00 ("Credits"). The value of the Credits shall be calculated on a monthly
basis and CGL and the Buyers shall cause the Company to provide the Shareholder
with a monthly report detailing the value of the Credits used and the remaining
balance of unused Credits. The Parties agree that the Credits used shall be
applied against the outstanding principal amount under the Promissory Note.
Notwithstanding anything herein to the contrary, if the Ticaboo Lodge is at 85%
occupancy or greater, Credits shall be valued at 100% of the standard room rate.
7.4 CERTAIN TAX MATTERS.
a. TAX PERIODS ENDING ON OR BEFORE THE EFFECTIVE DATE. The Shareholder
shall prepare or cause to be prepared and file or cause to be filed, at the
Shareholder's expense, all Tax Returns for the Company for all periods ending on
or prior to the Effective Date which are filed after the Effective Date. Subject
to CGL signing a confidentiality agreement with the Shareholder and its parent
company, the Shareholder shall permit CGL to review and comment on each such Tax
Return described in the preceding sentence prior to filing. The Shareholder
shall reimburse CGL for any Taxes of the Company with respect to such periods
within 15 days after payment by CGL or the Company of such Taxes to the extent
such Taxes are not reflected in the reserve for Tax Liability (excluding any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) shown in any balance sheet related to such liability.
b. COOPERATION ON TAX MATTERS.
(i) Each of the Parties shall cooperate fully, as and to the
extent reasonably requested by another Party, in connection with the filing
of Tax Returns pursuant to this Section 7.6 and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include,
without limitation, the retention and (upon the other Party's request) the
provision of records and information which are reasonably relevant to any
such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Shareholder agrees (1)
to retain or cause to be retained all books and records with respect to Tax
matters pertinent to the Company relating to any taxable period beginning
before the Effective Date until the expiration of the statute of
limitations (and, to the extent notified by CGL or the Shareholder, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (2)
to give CGL reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other Parties so request,
shall allow the other Parties to take possession of such books and records.
(ii) The Parties further agree, upon request, to use their
commercially reasonable efforts to obtain any certificate or other document
from any Governmental Authority or any other Person to mitigate, reduce or
eliminate any Tax that could be imposed (including with respect to the
Transaction). c. CERTAIN OTHER TAX LIABILITIES. All transfer, documentary,
sales, use, stamp, registration and other such Taxes and fees (including
any penalties and interest) incurred by or assessed against the parties in
connection with the transfer of the Shares pursuant to this Agreement
(including transfer or similar Tax imposed in any states or subdivisions)
shall be paid by the Shareholder when due, and the Shareholder will, at
their own expense, file all necessary Tax Returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable Law,
CGL and the Company will join in the execution of any such Tax Returns and
other documentation.
7.5 PLATTING OF LOTS The Shareholder agrees to perform, within ninety (90)
days following the Closing Date, all necessary actions required by any
applicable governmental entities with respect to the surveying and legal
platting of that certain unplatted property apart which the model home is
located, into six platted home lots. To the extent that the Shareholder does not
complete the platting of such lots within the ninety (90) day period set forth
above, CGL shall endeavor to have such lots platted and the cost incurred in
connection therewith shall be offset against the next principal and interest
installments owing under the Promissory Note.
7.6 COMPANY SOFTWARE. The Company shall continue to use the business
software systems in use as of the Effective Date until such time as the entire
balance of the Promissory Note is paid in full. If CGL or Buyers wish to revise,
change or upgrade the business software systems in use by the Company prior to
the payment in full of the Promissory Note, CGL and Buyers shall do so in
consultation with Shareholder, and any change in the business software used by
the Company shall be subject to the prior written consent of the Shareholder,
such consent not to be unreasonably withheld or delayed.
ARTICLE 8
CONDITIONS TO OBLIGATION TO CLOSE
8.1 CONDITIONS TO OBLIGATION OF THE BUYERS AND CGL. The obligation of the
Buyers and CGL to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:
a. The Company and the Shareholder shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants contained in this Agreement to be performed and
complied with by each of them prior to or at the Closing Date. The
representations and warranties of the Company and the Shareholder set forth in
this Agreement shall be true and correct at and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date except (i)
for any changes resulting from activities or transactions which may have taken
place after the date hereof and which are permitted or contemplated by the
Agreement, (ii) for such matters as would not, individually or in the aggregate,
have a Material Adverse Effect on the Company to the extent that any such
representation and warranty is expressly made as of another specified date and,
as to such representation or warranty, the same shall be true as of such
specified date.
b. All statutory requirements for the valid consummation by the
Company and the Shareholder of the transactions contemplated by this Agreement
and the Acquisition shall have been fulfilled and all authorizations, consents
and approvals including all of the third-party consents specified in Schedule
--------
8.1(f), and those of all Governmental Authorities required to be obtained in
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order to permit the consummation of the Acquisition and the transactions
contemplated hereby shall have been obtained in form and substance reasonably
satisfactory to CGL. All approvals of the Board of Directors of the Company and
the Shareholder necessary for the consummation of this Agreement, the
Acquisition and the transactions contemplated hereby shall have been obtained.
c. No Action shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (iii) affect adversely the right of the CGL to own the capital
stock of the Company and to control the Company.
d. The Company and the Shareholder shall have delivered to Buyer a
certificate to the effect that each of the conditions specified in Sections
--------
8.1(a)-(c) is satisfied in all respects.
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e. The Company shall have delivered to CGL and the Buyers (i) a copy
of the articles of incorporation of the Company certified by an appropriate
authority of the jurisdiction of its incorporation, (ii) a copy of the bylaws of
the Company certified by the Secretary thereof, (iii) the books and records of
the Company, (iv) a copy of the resolutions of the Board of Directors of the
Company and the Shareholder approving the transactions contemplated by this
Agreement certified by the Secretary thereof, and (v) certificates of good
standing/existence of the Company certified by and appropriate authority of the
jurisdiction issuing such certificate.
f. The Shareholder shall have procured all governmental approvals,
consents or authorization and third party consents specified on Schedule 8.1(f).
---------------
g. Each director and officer of the Company shall have executed and
delivered a resignation letter for such positions held with the Company.
h. The following additional documents shall be delivered at the
Closing by the Company and the Shareholder:
(i) Payoff of the two existing bank Loans and an executed release
of the existing deeds of trust ("TRUST RELEASE").
(ii) The stock certificates representing the Shares, accompanied
by duly executed stock powers;
provided, however, that Shareholder shall retain all Shares in escrow at the
offices of Shareholder's legal counsel as security for the Promissory Note,
which shall be released to CGL upon full and final payment of the Promissory
Note.
CGL and the Buyers may waive any condition specified in this Section 8.1 if it
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executes a writing so stating at or prior to the Closing.
8.2 CONDITIONS TO OBLIGATION OF THE COMPANY AND THE SHAREHOLDER. The
obligation of the Company and the Shareholder to consummate the transactions to
be performed by it in connection with the Closing is subject to satisfaction of
the following conditions:
a. CGL shall have performed in all material respects all obligations
and agreements and complied in all material respects with all covenants
contained in this Agreement to be performed and complied with by them prior to
or at the Closing Date. The representations and warranties of CGL set forth in
this Agreement shall be true and correct at and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date except (i)
for any changes resulting from activities or transactions which may have taken
place after the date hereof and which are permitted or contemplated by the
Agreement, (ii) for such matters as would not, individually or in the aggregate,
have a Material Adverse Effect on the CGL, or (iii) to the extent that any such
representation and warranty is expressly made as of another specified date and,
as to such representation or warranty, the same shall be true as of such
specified date.
b. All statutory requirements for the valid consummation by CGL of the
transactions contemplated by this Agreement and the Acquisition shall have been
fulfilled and all authorizations, consents and approvals including all of the
third-party consents specified in Schedule 8.2(g), and those of all Governmental
---------------
Authorities required to be obtained in order to permit the consummation of the
Acquisition and the transactions contemplated hereby shall have been obtained in
form and substance reasonably satisfactory to the Company and the Shareholder
unless such failure shall not have a Material Adverse Effect on CGL. All
approvals of the members of CGL necessary for the consummation of the
Acquisition, this Agreement, and the transactions contemplated hereby shall have
been obtained.
c. No Action shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of CGL to own the Shares and to
control the Company.
d. CGL shall have delivered to the Company a certificate to the effect
that each of the conditions specified in Sections 8.2(a)-(c) is satisfied in all
-------------------
respects.
e. CGL shall have delivered the Purchase Price, in accordance with
Section 2.2.
-----------
f. CGL shall have executed and delivered the Promissory Note, the
Security Agreement and the Deed of Trust.
g. Each Buyer shall have executed and delivered a Guaranty Agreement.
h. The Company shall have delivered to the Shareholder the Excluded
Assets.
i. CGL shall have procured all governmental approvals, consents and
authorizations and third party consents specified in Schedule 8.2(g).
---------------
j. CGL shall have provided evidence to the Shareholder that CGL has
procured worker's compensation insurance for employment of the its employees and
insurance policies with comparable coverage to the policies and limits
maintained by the Company prior to the Effective Date.
k. CGL shall have provided a Lenders Title Insurance Policy.
l. The Boards of Directors of the Company, Shareholder, Crested Corp.
and U.S. Energy Corp. shall have approved of the transaction contemplated by
this Agreement.
The Company and the Shareholder may waive any condition specified in this
Section 8 if they execute a writing so stating at or prior to the Closing.
----------
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The Parties agree that, notwithstanding any examination made by or on
behalf of the respective Parties, the knowledge of the Parties or any of the
respective agents of the Parties, or the acceptance by any Party of any
certificate or opinion, each statement, representation, warranty, indemnity,
covenant and agreement made by the Parties in this Agreement shall survive the
consummation of the transactions contemplated hereby for a period of twelve (12)
months following the Closing Date.
ARTICLE 10
INDEMNIFICATION
10.1 SHAREHOLDER INDEMNITY. The Shareholder shall indemnify, defend and
hold harmless the Buyers and CGL and their respective successors, heirs,
assigns, and CGL's officers, directors, members, managers, equity holders, and
employees (collectively, the "ACQUIROR GROUP") against any Actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes,
liens, losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses (collectively, "ADVERSE CONSEQUENCES") that any
member of Acquiror Group may suffer, sustain or become subject to as the result
of, or arising from or in connection with (a) any breach of any of the
representations or warranties made by the Company or the Shareholder in this
Agreement, (b) any breach of the covenants and agreements made by the Company or
the Shareholder in this Agreement or any exhibit hereto delivered by the Company
or the Shareholder in connection with the Closing, (c) any Excluded Liabilities.
10.2 CGL AND THE BUYERS INDEMNITY. CGL and the Buyers shall jointly and
severally indemnify and hold harmless the Shareholder and its successors,
assigns, officers, directors, equity holders, and employees against any Adverse
Consequences which they may suffer, sustain or become subject to as the result
of, arising from or in connection with (a) a breach of any representation,
warranty, covenant or agreement by CGL contained in this Agreement or any
exhibit or Schedule or (b) the ownership or operation of the Company after the
Effective Date, except for (i) any amounts relating to Excluded Liabilities or
(ii) the breach of any representation, warranty, covenant or agreement by the
Company or the Shareholder in this Agreement.
10.3 INDEMNITY LIMITATION. Anything in Section 10.1 to the contrary
notwithstanding, no amounts shall be payable by the Shareholder under Section
10.1(a) unless and until the Acquiror Group shall have incurred or reasonably
expects that it will incur on a cumulative basis Adverse Consequences in an
amount exceeding $10,000 (the "BASKET"), at which time the Shareholder shall be
responsible for all amounts due, including amounts previously accumulated but
unreimbursed. Notwithstanding the foregoing, no threshold shall be required to
be met as a condition to indemnification with respect to willful breaches of
representations and warranties or of covenants under this Agreement.
Notwithstanding anything to the contrary contained herein, other than with
respect to the Excluded Liabilities for which the Shareholder shall remain
liable, no Party shall be liable for an amount in excess of the principal amount
of the Promissory Note plus accrued interest at such time outstanding as of the
date any claim is due and payable for Adverse Consequences, subject to
indemnification as a result of a breach of representation or warranty, and any
such valid claim shall be offset against the principal balance owing under the
Promissory Note.
10.4 INDEMNIFICATION PROCEDURES.
a. If any third party shall notify any Party to this Agreement (the
"INDEMNIFIED PARTY") with respect to any matter which may give rise to a claim
for indemnification against any other Party to this Agreement (the "INDEMNIFYING
PARTY") under Article 10, then the Indemnified Party shall notify each
-----------
Indemnifying Party thereof with five (5) days of the Indemnified Party's
knowledge of such claim; provided, however, that no delay on the part of the
-------- -------
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder unless (and then
solely to the extent) the Indemnifying Party is prejudiced by the delay. Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
Party in writing within 15 days after the Indemnified Party has given notice of
the Third Party Claim that the Indemnifying Party will undertake the defense of
such claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, and (C) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.
The Indemnified Party may participate in the defense of such claim with
co-counsel of its choice; provided, however, that the fees and expenses of the
-------- -------
Indemnified Party's counsel shall be at the expense of the Indemnified Party
unless (A) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (B) the Indemnifying Party has failed to assume the defense and employ
counsel as provided herein or (C) a claim shall have been brought or asserted
against the Indemnifying Party as well as the Indemnified Party, and such
Indemnified Party shall have been advised in writing by counsel that there may
be one or more factual or legal defenses available to it that are in conflict
with those available to the Indemnifying Party, in which case such co-counsel
shall be at the expense of the Indemnifying Party; provided, however, that the
-------- -------
Indemnifying Party will not be required to pay the fees and expenses of more
than one separate principal counsel (and one appropriate local counsel) for all
Indemnified Parties. If, within such 15-day period, the Indemnifying Party does
not assume the defense of such matter or fails to defend the matter in the
manner set forth above, the Indemnified Party may defend against the matter in
any manner that it reasonably may deem appropriate and the Indemnifying Party
will reimburse the Indemnified Party promptly and periodically for the costs of
defending against such claim (including reasonable attorneys' fees and expenses)
and the Indemnifying Party will remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the claim to the fullest extent provided herein,
provided, however, that the Indemnified Party may not consent to the entry of
----- -------
any judgment with respect to the matter or enter into any settlement with
respect to such matter without the consent of the Indemnifying Party, which
consent may not be unreasonably withheld.
b. Except for (i) fraud, in which case all remedies at law or in
equity shall be available to the Parties, and (ii) other remedies expressly
provided for in this Agreement, the Parties hereby agree that the foregoing
provisions of this Article 10 shall be the sole and exclusive means of recovery
----------
of a Party hereto or any other Person entitled to indemnification under this
Article 10.
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ARTICLE 11
TERMINATION
11.1 TERMINATION OF AGREEMENT. The Parties may terminate this Agreement as
provided below:
a. The Parties may terminate this Agreement by mutual written consent
at any time prior to the Closing;
b. CGL may terminate this Agreement by giving written notice to
Shareholder at any time prior to the Closing (i) in the event Shareholder or the
Company has breached any representation, warranty or covenant contained in this
Agreement in any material respect, CGL has notified the Shareholder of the
breach and the breach has continued without cure for a period of 30 days after
the notice of breach or (ii) if the Closing shall not have occurred on or before
September 2, 2003 by reason of the failure of any condition precedent under
Section 8.1 hereof (unless the failure results primarily from CGL breaching any
representation, warranty or covenant contained in this Agreement); and
c. The Shareholder may terminate this Agreement by giving written
notice to CGL at any time prior to the Closing (i) in the event CGL has breached
any representation, warranty or covenant contained in this Agreement in any
material respect, the Shareholder has notified CGL of the breach and the breach
has continued without cure for a period of 30 days after the notice of breach or
(ii) if the Closing shall not have occurred on or before September 2, 2003 by
reason of the failure of any condition precedent under Section 8.2 hereof caused
by CGL or Buyers (unless the failure results primarily from the Shareholder or
Company breaching any representation, warranty or covenant contained in this
Agreement).
11.2 EFFECT OF TERMINATION. If any Party terminates this Agreement pursuant
to Section 11.1 hereof, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party (other
than pursuant to Article 11 hereof, including all sections and subsections
thereof); provided, however, no termination shall relieve any Party from any
Liability arising from or relating to such Party's breach at or prior to
termination.
ARTICLE 12
MISCELLANEOUS
12.1 CONFIDENTIALITY. Each Party agrees that it shall, and it shall direct
and use its best efforts to cause its officers, directors, shareholders,
employees, agents and representatives to, and the terms of the transactions
contemplated hereby strictly confidential and to not disclose such matters to
any third party without the other Party's prior written consent, provided,
however, that U.S. Energy may make a public disclosure to comply with applicable
securities law.
12.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
12.3 ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they relate in any way to the subject matter
hereof.
12.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of their
rights, interests, or obligations hereunder without the prior written approval
of CGL and the Shareholder.
12.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
12.6 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, or by expedited courier, next day delivery, and
addressed to the intended recipient as set forth below:
If to CGL or the Buyers: Copy to:
Cactus Group, LLC ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: Lea ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Shareholder: Copy to:
Plateau Resources Limited ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
c/o U.S. Energy Corp. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. (▇▇▇▇) ▇▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, messenger service, facsimile, ordinary
mail, or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
12.7 GOVERNING LAW; JURISDICTION; VENUE. This Agreement shall be governed
by and construed in accordance with the laws of the State of Wyoming without
regard to its rules of conflict of laws. Each Party hereby irrevocably and
unconditionally consents and submits to the exclusive jurisdiction of the state
courts of the State of Wyoming and of any federal court located in the State of
Wyoming in connection with any actions, disputes or proceedings arising out of
or relating to this Agreement. Each Party irrevocably and unconditionally
waives, to the fullest extent he, she or it may legally and effectively do so,
any objection that it or he may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to the Agreement in
any Wyoming state or federal court. Each of the Parties hereto irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court. In any
such action, dispute or proceeding, each Party hereby absolutely and irrevocably
waives personal service of any summons, complaint, declaration or other process
and hereby absolutely and irrevocably agrees that service thereof may be made by
certified or registered first class mail directed to such Party at its address
in accordance with Section 12.6 hereof.
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12.8 WAIVER OF JURY TRIAL. NO PARTY TO THIS AGREEMENT OR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR THE DEALINGS OR THE RELATIONSHIP
BETWEEN THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH
A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED
BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NEITHER PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER PARTY THAT
THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
12.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyers and the Shareholder. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence
12.10 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
12.11 EXPENSES. Each of the Parties will bear their own costs and expenses
(including legal, fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
12.12 CONSTRUCTION. The Parties intend that each representation, warranty,
and covenant contained herein shall have independent significance. If any Party
has breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from or mitigate
the fact that the Party is in breach of the first representation, warranty, or
covenant.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date and year first above written.
CANYON HOMESTEADS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: President
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SHAREHOLDER:
PLATEAU RESOURCES LIMITED
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
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Its: President
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CACTUS GROUP, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: President
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BUYERS:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
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D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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