AGREEMENT OF PURCHASE AND SALE OF ASSETS
BETWEEN
FENWAY RESOURCES LTD.,
a Delaware corporation
("Seller"),
and
NEVADA/UTAH GOLD, INC.,
a Nevada corporation
("Purchaser")
THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS ("Agreement") is made and
entered into in duplicate this 10th day of August, 1998, by and among
Nevada/Utah Gold, Inc., a Nevada corporation ("Purchaser"), and Fenway Resources
Ltd., a Delaware corporation ("Seller"), and provides for the Purchaser to
acquire substantially all of the assets of the Seller, subject to the
liabilities assumed by the Purchaser pursuant to this Agreement and no other
liabilities.
RECITALS
A. The Purchaser desires to acquire, on the terms and subject to the
conditions specified in this Agreement, the business of the Seller, insofar as
that business is conducted by the use of the Acquired Assets.
B. The Seller believes that it is desirable and in the best interests of
the Seller that it sell the Acquired Assets to the Purchaser, on the terms and
subject to the conditions specified in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I
DEFINITIONS
As used in this Agreement, the capitalized terms specified in this
Agreement shall have the meanings and definitions specified and indicated by the
provisions of this Article I, unless a different and common meaning of such a
term is clearly indicated by the context, and variants and derivatives of the
those terms shall have correlative meanings. To the extent that certain of the
definitions specified in this Article I suggest, indicate, or express agreements
between or
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among parties to this Agreement, or contain representations or warranties or
covenants of a party, the parties agree to the same, by execution of this
Agreement. Agreements, representations, warranties and covenants specified in
any part or provision of this Agreement shall for all purposes of this Agreement
be treated in the same manner as other such agreements, representations,
warranties and covenants specified elsewhere in this Agreement, and the article,
section or paragraph of this Agreement within which such an agreement,
representation, warranty, or covenant appears shall have no separate meaning or
effect on the same.
1.1 Accumulated Funding Deficiency: An "accumulated funding deficiency" as
defined in Section 302(a)(2) of ERISA or the last two sentences of Section
412(a)(2) of the Code, or, in the last two (2) sentences of Section 412(a)(2) of
the Code, or, in either case, successor provisions to such provisions adopted by
amendments to ERISA or the Code, as the case may be, and including, in each
case, other provisions of ERISA, of the Code, or of other law, and regulations
adopted pursuant to ERISA, or the Code, or such other law, modifying, amending,
interpreting or otherwise affecting the application of such provisions, either
in general or as applied to the nature or circumstances of a particular Entity
that is a party to, or is affected by, or is involved in, the Transaction and
with respect to which Entity the use of the term in this Agreement, or in the
particular portion of this Agreement, is relevant.
1.2 Acquired Assets: The assets of the Seller being acquired by the
Purchaser pursuant to the provisions of this Agreement, as identified on
Schedule 1.2 to this Agreement, which, by this reference, is made a part of this
Section 1.2, as though specified verbatim in this Section 1.2, and all other
assets of the Seller, tangible or intangible, including contractual, warranty,
and other rights, the use or value of which is an inherent part of the assets so
identified, or which relate to or result from transactions of the Seller
involving the assets so identified.
1.3 Acquired Business: The businesses conducted by the Seller in which the
Seller utilized the Acquired Assets, as described on Schedule 1.3 to this
Agreement, which, by this reference, is made a part of this Section 1.3, as
though specified verbatim in this Section 1.3.
1.4 Acquired Facilities: All warehouses, stores, plant, production
facilities, manufacturing facilities, processing facilities, fixtures, and
improvements owned or leased by the Seller, or otherwise used by the Seller, in
connection with the operation of its business or leased or subleased by the
Seller to others, but only to the extent that the same consist of Acquired
Assets.
1.5 Affiliate: As it relates to a person, a parent, spouse, brother or
sister, or natural or adopted lineal descendent or spouse of such descendent of
such person, and any proprietorship, corporation, partnership, congregation,
organization, firm, estate, association, league, club, society, joint venture,
trust or other form of entity in which such person or parent, spouse, brother or
sister, or natural or adopted lineal descendent or spouse of such descendent or
such person may have an equity interest or in which such person or parent,
spouse, brother or sister, or natural or adopted lineal descendent or spouse of
such descendent of such person is a proprietor, partner, officer, director,
shareholder, employee, consultant, independent contractor, owner, co-venturer,
employer, agent, representative, settlor or beneficiary.
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1.6 Agreement: This Agreement of Purchase and Sale of Assets, including all
of its schedules and exhibits and all other documents specifically referred to
in this Agreement that have been or are to be delivered by a party to this
Agreement to another such party in connection with the Transaction or this
Agreement, and including all duly adopted amendments, modifications, and
supplements to or of this Agreement and such schedules, exhibits and other
documents.
1.7 Assumed Liabilities: The Liabilities of the Seller being assumed by the
Purchaser pursuant to pursuant to this Agreement, as specifically identified in
Schedule 1.7 to this Agreement, which, by this reference, is made a part of this
Section 1.7, as though specified verbatim in this Section 1.7, and no other
Liabilities of the Seller.
1.8 Business Day: Any day that is not a Saturday, Sunday, day on which
banks in Carson City, Nevada or Wilmington, Delaware, are authorized to close.
1.9 Closing: The completion of the Transaction, to occur as described in
Article II of this Agreement.
1.10 Closing Date: The date on which the Closing actually occurs, which
shall be on that date which is exactly four (4) business days following the date
upon which the appropriate consent of the shareholders of the Seller approving
the Transaction is received by the Seller, unless otherwise agreed by the
parties, but shall not in any event be prior to satisfaction or waiver of the
conditions to Closing specified in Article VII of this Agreement.
1.11 Closing Time: The time at which the Closing actually occurs. All
events that are to occur at the Closing Time shall, for all purposes, be deemed
to occur simultaneously, except to the extent, if at all, that a specific order
of occurrence is otherwise described.
1.12 Code: The Internal Revenue Code of 1986, as amended and in effect on
the date the parties sign this Agreement.
1.13 Complete Withdrawal: A "complete withdrawal" from a Multiemployer Plan
as defined in Section 4203 of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations pursuant to ERISA or such other law, modifying,
amending, interpreting or otherwise affecting the application of such provision,
either in general or as applied to the nature or circumstances of a particular
Entity that is a party to, or is affected by, or is involved in, the Transaction
and with respect to which Entity the use of the term in this Agreement, or in
the particular location in this Agreement, is relevant.
1.14 Consent Statement: The document prepared by the Seller for submission
to its shareholders soliciting their written consents to the consummation of the
Transaction.
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1.15 Consideration: Seven million six hundred forty-four thousand
sixty-seven (7,644,067) shares of the Purchaser's $.001 par value common stock,
to be issued by the Purchaser to the Seller at the Closing, subject to
modification and adjustment as specified by the provisions of this Agreement.
1.16 Control: Generally, the power to direct the management or affairs of
an Entity.
1.17 Entity: A corporation, partnership, sole proprietorship, joint
venture, or other form of organization formed for the conduct of a business,
whether active or passive.
1.18 ERISA: The Employee Retirement Income Security Act of 1974, as amended
and in effect at the time of execution of this Agreement.
1.19 Exchange Act: The Securities Exchange Act of 1934, as amended to the
date as of which any reference thereto is relevant pursuant to this Agreement,
including any substitute or replacement statute adopted in place or lieu
therefor.
1.20 GAAP: Generally Accepted Accounting Principles, as in effect on the
date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance with GAAP. All references in this
Agreement to financial statements prepared in accordance with GAAP shall mean in
accordance with GAAP consistently applied throughout the periods to which
reference is made.
1.21 Inventories: The stock of raw materials, work-in-process and finished
goods, including, but not limited to, finished goods purchased for resale, held
by the Seller for manufacturing, assembly, processing, finishing, sale, or
resale to others from time to time in the ordinary course of the business of the
Seller, in the form in which such inventories then are held or after
manufacturing, assembling, finishing, processing, incorporating with other goods
or items, refining, or similar processes.
1.22 IRS: The Internal Revenue Service.
1.23 Liabilities: At any time ("Determination Time"), the obligations of a
person or Entity, whether known or unknown, contingent or absolute, recorded on
its books or not, resulting in any way from facts, events, agreements,
obligations or occurrences that existed, occurred or transpired at a prior point
in time, or resulted from the passage of time to the Determination Time, but not
including obligations accruing or payable after the Determination Time to the
extent (but only to the extent) that such obligations (a) result from previously
existing agreements for services, benefits, or other considerations, and (b)
accrue or become payable with respect to services, benefits, or other
considerations received by the person or Entity after the Determination Time.
1.24 Multiemployer Plan: A "multiemployer plan," as defined in Section
3(37) of ERISA or Section 414(f) of the Code, or, in either case, successor
provisions to such provisions adopted by amendments to ERISA or the Code, as the
case may be, and including, in each case,
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other provisions of ERISA, of the Code, or of other law, and regulations adopted
pursuant to ERISA, or the Code, or such other law, modifying, amending,
interpreting, or otherwise affecting the application of such provisions, either
in general or as applied to the nature or circumstances of a particular Entity
that is a party to, or is affected by, or is involved in, the Transaction and
with respect to which Entity the use of the term in this Agreement, or in the
particular location in this Agreement, is relevant.
1.25 Partial Withdrawal: A "partial withdrawal" from a Multiemployer Plan,
as defined in Section 4205 of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting or otherwise affecting the application of such
provision, either in general or as applied to the nature or circumstances of a
particular Entity that is a party to, or is affected by, or is involved in, the
Transaction and with respect to which Entity the use of the term in this
Agreement, or in the particular location in this Agreement, is relevant.
1.26 Payables: Liabilities of a party resulting from the borrowing of money
or the incurring of obligations for merchandise or goods purchased.
1.27 Plan Termination: A termination of a Pension Plan, whether partial or
complete, within the meaning of Title IV of ERISA.
1.28 PBGC: The Pension Benefit Guaranty Corporation.
1.29 Pension Plan: A "pension plan" or "employee pension benefit plan," as
defined in Section 3(2) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular Entity that is a party to, or is affected by, or is involved in,
the Transaction and with respect to which Entity the use of the term in this
Agreement, or in the particular location in this Agreement, is relevant.
1.30 Prohibited Transaction: A "prohibited transaction," as defined in
Section 406 of ERISA or Section 4975(c) of the Code, or, in either case,
successor provisions to such provisions adopted by amendments to ERISA or the
Code, as the case may be, and including, in each case, other provisions of
ERISA, of the Code or of other law, and regulations adopted pursuant to ERISA,
or the Code, or such other law, modifying, amending, interpreting, or otherwise
affecting the application of such provisions, either in general or as applied to
the nature or circumstances of a particular Entity that is a party to, or is
affected by, or is involved in, the Transaction and with respect to which Entity
the use of the term in this Agreement, or in the particular location in this
Agreement, is relevant.
1.31 Proprietary Rights: Trade secrets, copyrights, patents, trademarks,
service marks, customer lists, and all similar types of intangible property
developed, created or owned by the
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Seller, or used by the Seller in connection with its business, whether or not
the same are entitled to legal protection.
1.32 Purchaser: Nevada/Utah Gold, Inc., a Nevada corporation, which,
pursuant to the terms of this Agreement, is purchasing the Acquired Assets.
1.33 Receivables: Accounts receivable, notes receivable, and other
obligations presented as assets on the books, records and financial statements
of the Seller, in accordance with GAAP, indicating moneys owed, due and payable
to the Entity or person on whose financial statements such receivables are
presented.
1.34 Reportable Event: A "reportable event," as defined in Section 4043(b)
of ERISA or successor provisions to such provision adopted by amendments to
ERISA and including other provisions of ERISA or of other law, and regulations
adopted pursuant to ERISA or such other law, modifying, amending, interpreting,
or otherwise affecting the application of such provision, either in general or
as applied to the nature or circumstances of a particular Entity that is a party
to, or is affected by, or is involved in, the Transaction and with respect to
which Entity the use of the term in this Agreement, or in the particular
location in this Agreement, is relevant.
1.35 SEC: The Securities and Exchange Commission.
1.36 Securities Act: The Securities Act of 1933, as amended to the date as
of which any reference thereto is relevant pursuant to this Agreement, including
any substitute or replacement statute adopted in place or lieu thereof.
1.37 Seller: Fenway Resources Ltd., a Delaware corporation, as the seller
of the Acquired Assets.
1.38 Subsidiary: With respect to any Entity, another Entity of which fifty
percent (50%) or more of the effective voting power, or the effective power to
elect a majority of the board of directors or similar governing body, or fifty
percent (50%) or more of the true equity interest, is owned by such first
Entity, directly or indirectly.
1.39 Transaction: The sale of the Acquired Assets, subject to the Assumed
Liabilities, for the Consideration as contemplated by, and on the terms and
subject to the conditions of, this Agreement.
1.40 Welfare Plan: A "welfare plan" or an "employee welfare benefit plan,"
as defined in Section 3(1) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular Entity that is a party to, or is affected by, or is involved in,
the Transaction and with respect to which Entity the use of the term in this
Agreement, or in the particular location in this Agreement, is relevant.
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ARTICLE II
THE TRANSACTION
2.1 The Transaction. On the Closing Date, and at the Closing Time, on, and
in all instances subject to, each of the terms, conditions, provisions and
limitations specified in this Agreement, the Seller shall sell, transfer,
convey, and assign to the Purchaser, by instruments satisfactory in form and
substance to the Purchaser, and the Purchaser shall acquire from the Seller, the
Acquired Assets, subject to the Assumed Liabilities, and only those Liabilities
and no others, in exchange for the Consideration. The Seller represents that the
assets described on Schedule 1.2 to this Agreement are all the assets reasonably
necessary for the conduct of the Acquired Business in the ordinary course in the
same manner as that in which such business has been conducted in the immediate
past, including, without limitation, all Proprietary Rights and all contract,
warranty, and other intangible rights relating to or resulting from the Acquired
Business. Neither the Purchaser nor any of its Affiliates is assuming, becoming
liable for, agreeing to discharge or in any manner becoming in any way
responsible for, any of the Liabilities of the Seller other than those expressly
identified on Schedule 1.7 to this Agreement and accepted by the Purchaser.
2.2 Manner of Payment. The certificate evidencing and representing the
Consideration shall be issued and delivered by the Purchaser to the Seller on
the Closing Date.
2.3 Closing. The Closing of the Transaction shall occur at the offices of
White and ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ or at such other place as the Purchaser and the Seller may agree, on the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
The Purchaser represents and warrants the following, the truth and accuracy
of each of which shall constitute a condition precedent to the obligations of
the Seller created by the provisions of this Agreement:
3.1 Organization and Qualification. The Purchaser is a corporation duly
organized, validly existing, and in good standing pursuant to the laws of its
respective jurisdiction of incorporation and has the requisite corporate power
and authority to enter into and to perform this Agreement.
3.2 Authority Relative to This Agreement. The Purchaser has the requisite
corporate power and authority to carry out its obligations specified by the
provisions of this Agreement. The execution and delivery of this Agreement and
the consummation of the Transaction have been duly authorized and approved by
the requisite corporate authority of Purchaser and no other corporate
proceedings on the part of the Purchaser are necessary to approve and adopt this
Agreement or to approve the consummation of the Transaction, including the
issuance and
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delivery of the Consideration. The Purchaser has, and any officer, director or
representative executing this Agreement for and on behalf of the Purchaser has;
the legal capacity and authority to enter into and deliver this Agreement. This
Agreement is a valid and legally binding obligation of the Purchaser and is
enforceable completely against the Purchaser in accordance with its terms,
except as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium and similar laws relating to creditors'
rights generally, and subject to approval of any and all governmental regulatory
agencies and authorities having jurisdiction of the relationship between the
parties contemplated by the provisions of this Agreement and the Transaction.
3.3 Absence of Breach; No Consents. The execution, delivery and performance
of this Agreement, and the performance by Purchaser of its obligations specified
by the provisions of this Agreement (except for compliance with any regulatory
or licensing laws applicable to the business of the Purchaser, all of which, to
the extent applicable to Purchaser (and to the extent within its control), will
be satisfied in all material respects prior to the Closing) do not (a) conflict
with, and will not result in a breach of, any of the provisions of the Articles
of Incorporation or Bylaws of Purchaser; (b) contravene any law, rule or
regulation of any State or Commonwealth or of the United States, or of any
applicable foreign jurisdiction, or any order, writ, judgment, injunction,
decree, determination, or award affecting or binding upon the Purchaser, in such
a manner as to provide a basis for enjoining or otherwise preventing
consummation of the Transaction; (c) conflict with or result in a material
breach of or default pursuant to any material indenture or loan or credit
agreement or any other material agreement or instrument to which Purchaser is a
party, in such a manner as to provide a basis for enjoining or otherwise
preventing consummation of the Transaction; or (d) require the authorization,
consent, approval or license of any third party of such a nature that the
failure to obtain the same would provide a basis for enjoining or otherwise
preventing consummation of the Transaction.
3.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the Transaction or any related transaction based upon any agreements, written
or oral, made by or on behalf of Purchaser.
3.5 Legal Proceedings. There is no action, suit, proceeding, claim,
arbitration, or investigation by any government, governmental agency or other
person or Entity (i) pending to which the Purchaser is a party; (ii) threatened
against or relating to the Purchaser or any of its assets or businesses; or
(iii) challenging the Purchaser's right to execute, acknowledge, seal, deliver,
perform pursuant to this Agreement, or consummate the Transaction, and there is
no basis for any such action, suit, proceeding, claim, arbitration or
investigation.
3.6 Insider Transactions. Schedule 3.6 to this Agreement, which, by this
reference, made a part of this Section 3.6, as though specified verbatim in this
Section 3.6, is a true, correct and complete list of the following:
3.6.1 The amounts and other essential terms of indebtedness or other
obligations,
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agreements, undertakings, Liabilities or commitments (contingent or
otherwise) of the Purchaser to or from any past or present officer,
director, member, stockholder or any person related to, controlling,
controlled by or under common control with any of the foregoing
("Purchaser's Control Persons").
3.6.2 All transactions between each Purchaser's Control Person and the
Purchaser since the Purchaser's date of incorporation and during all times
thereafter, and all proposed or contemplated transactions with each
Purchaser's Control Person, together with the essential terms thereof.
3.7 Complete Disclosure. This Agreement (including the exhibits and
schedules attached to this Agreement) does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained herein not misleading. There is no fact known to the
Purchaser which is not disclosed in this Agreement which materially adversely
affects the accuracy of the representations and warranties specified in this
Agreement.
3.8 No Bribes or Kickbacks. The Seller has not, directly or indirectly,
paid or delivered any fee, commission, or other money, funds, or property,
however characterized, to any person or Entity, in the United States or any
other country, and the Purchaser does not know and does not have reason to
believe that any conduct by the Purchaser, or any of its officers, directors,
employees, agents, or representatives, or any of them, is or has been illegal
pursuant to any federal, state, or local law of the United States or any other
country having jurisdiction of such conduct. Neither the Purchaser nor any of
its officers, directors, employees, agents, or representatives, has
participated, directly or indirectly, in any boycott or other similar practice
affecting any of the actual or potential customers of the Purchaser. The
Purchaser has at all times done business in an open and ethical manner.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller represents and warrants the following, the truth and accuracy of
each of which shall constitute a condition precedent to the obligations of
Purchaser created by the provisions of this Agreement.
4.1 Organization and Qualification. The Seller is a corporation duly
organized, validly existing, and in good standing pursuant to the laws of its
respective jurisdiction of incorporation and each has the requisite corporate
power and authority to conduct its business as it is now being conducted. The
Seller is duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned or
leased by it, or the nature of its activities, is such that qualification as a
foreign corporation in that jurisdiction is required by law. No part of the
Acquired Business is separately incorporated, but the Acquired Business has been
conducted by Seller (none of which is being purchased pursuant to the
Transaction) by Entities qualified to do business to the extent required by
applicable law in connection with the activities of the Acquired Business.
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4.2 Authority Relative to This Agreement. The Seller has the requisite
corporate power and authority to carry out its obligations specified by the
provisions of this Agreement. The execution and delivery of this Agreement and
the consummation of the Transaction have been duly authorized and approved by
the requisite corporate authority of Seller and no other corporate proceedings
on the part of the Seller are necessary to approve and adopt this Agreement or
to approve the consummation of the Transaction, including the issuance and
delivery of the Consideration, except for shareholder approval specified
elsewhere in this Agreement. The Seller has, and any officer, director or
representative executing this Agreement for and on behalf of the Seller has, the
legal capacity and authority to enter into and deliver this Agreement. This
Agreement is a valid and legally binding obligation of the Seller and is
enforceable completely against the Seller in accordance with its terms, except
as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium and similar laws relating to creditors'
rights generally, and subject to approval of any and all governmental regulatory
agencies and authorities having jurisdiction of the relationship between the
parties contemplated by the provisions of this Agreement and the Transaction.
4.3 Absence of Breach; No Consents. The execution, delivery, and
performance of this Agreement, and the performance by the Seller of its
obligations created by the provisions of this Agreement, do not (a) conflict
with or result in a breach of any of the provisions of the Certificate of
Incorporation or Bylaws of the Seller; (b) contravene any law, ordinance, rule,
or regulation of any State or Commonwealth or political subdivision of either or
of the United States (except for compliance with regulatory or licensing laws
all of which, to the extent applicable to the Seller (and to the extent within
the control of the Seller), will be satisfied in all material respects prior to
the Closing), or of any applicable foreign jurisdiction, or contravene any
order, writ, judgment, injunction, decree, determination, or award of any court
or other authority having jurisdiction, or cause the suspension or revocation of
any authorization, consent, approval, or license, presently in effect, which
affects or obligates the Seller or all or any part of the Acquired Assets or any
material properties of the Acquired Business, except in any such case where such
contravention will not have a material adverse effect on the business, condition
(financial or otherwise), operations or prospects of the Acquired Business and
will not have a material adverse effect on the validity of this Agreement or on
the validity of the consummation the Transaction; (c) conflict with, or result
in a material breach of, or default pursuant to, any material indenture or loan
or credit agreement or any other material agreement or instrument to which the
Seller or any of part of the Acquired Business is a party or by which any of the
Acquired Assets may be affected or obligated; (d) require the authorization,
consent, approval, or license of any third party; or (5) constitute grounds for
the loss or suspension of any permits, licenses, or other authorizations used in
the Acquired Business.
4.4 Brokers. No broker, finder, or investment banker is entitled to any
brokerage, finder's, or other fee or commission in connection with this
Agreement or the Transaction or any related transaction based upon any
agreements, written or oral, made by or on behalf of Seller. The Seller does not
have any obligation to pay finder's or broker's fees or commissions in
connection with the exercise of options to renew or extend real estate leases to
which the Seller is a party.
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4.5 Legal Proceedings. Schedule 4.5 to this Agreement, which, by this
reference, is made a part of this Section 4.5, as though specified verbatim in
this Section 4.5, specifies a complete and accurate list of all actions, suits,
proceedings, claims, arbitrations, and investigations by any government,
governmental agency or other person or entity (i) pending to which the Seller is
a party; (ii) threatened against or relating to the Seller or any or its assets
or businesses; (iii) challenging the Seller's right to execute, acknowledge,
seal, deliver, perform pursuant to, this Agreement, or consummate the
Transaction; or (iv) asserting any right with respect to any of the Acquired
Assets. Except as specified in that Schedule 4.5, there is no action, suit,
proceeding, claim, arbitration, or investigation by any government, governmental
agency or other person or Entity (a) pending to which the Seller is a party;
(ii) threatened against or relating to the Seller or any of its assets or
businesses; (iii) challenging the Seller's right to execute, acknowledge, seal,
deliver, perform pursuant to, this Agreement, or consummate the Transaction; or
(iv) asserting any right with respect to any of the Acquired Assets.
4.6 Inventory. The Inventory as of the date of this Agreement, and all
Inventory created after the date of this Agreement through the Closing Date,
consist of items of a quality and quantity usable and salable in the ordinary
course of business by the Seller, except for obsolete and slow-moving items and
items below standard quality, all of which on or prior to the date of this
Agreement have been written down on the books of the Seller to net realizable
market value or have been provided for by adequate reserves. All Inventory is
free from defects which might provide claims for breach of warranty or product
liability, except such items which have been identified and valued to specify
their defective condition. All items included in the Inventory are the property
of the Seller, except for sales made in the ordinary course of business since
the date of this Agreement, and for each of these sales either the purchaser has
made full and complete payment therefor or the purchaser's liability to make
full and complete payment therefor is specified on the books and records of the
Seller. No item included in such Inventory has been pledged as collateral or are
held by the Seller on consignment from other persons or are currently subject to
any such interest or claim. The Inventory specified on the Seller's books and
records is based on quantities determined by physical count or measurement and
are valued at the lower of cost, determined on a last-in, first-out basis, or
realizable market value.
4.7 Conduct of Business in Compliance with Regulatory and Contractual
Requirements. The Seller has conducted and is conducting its business in
compliance with all applicable laws. Neither the real or personal properties
owned, leased, operated or occupied by the Seller nor the use, operation or
maintenance thereof, nor any of the Acquired Assets, nor their use, operation or
maintenance (i) violates any laws, or (ii) violates any restrictive or similar
covenant, agreement, commitment, understanding or arrangement.
4.8 Real Property. Schedule 4.8 to this Agreement, which, by this
reference, is made a part of this Section 4.8, as though specified verbatim in
this Section 4.8, specifies a complete and accurate description of all interests
in real property owned or claimed by the Seller. Other than as specified in that
Schedule 4.8, the Seller does not own or have any interest in any real property.
4.9 Condition of Personal Property. The Seller has sole and exclusive, good
and
11
merchantable title to all of the personal property owned by it, free and clear
of all pledges, claims, liens, restrictions, security interests, charges and
other encumbrances. All of such personal property is in good repair and good
operating condition, fit for its intended purposes, and is adequate for the
continuation of the Acquired Business.
4.10 Insider Transactions. Schedule 4.10 to this Agreement, which, by this
reference, is made a part of this Section 4.10, as though specified verbatim in
this Section 4.10, specifies a complete and accurate list of the following:
4.10.1 The amounts and other essential terms of indebtedness or other
obligations, agreements, undertakings, Liabilities or commitments
(contingent or otherwise) of the Seller to or from any past or present
officer, director, member, stockholder or any person related to,
controlling, controlled by or under common control with any of the
foregoing ("Seller's Control Persons").
4.10.2 All transactions between each Seller's Control Person and the
Seller since the Seller's date of incorporation and during all times
thereafter, and all proposed or contemplated transactions with each
Seller's Control Person, together with the essential terms thereof.
4.11 Adverse Conditions. The Seller has no knowledge of any present or
future condition, state of facts or circumstances which has affected or may
affect adversely the Acquired Business or prevent the Purchaser from conducting
the Acquired Business.
4.12 Complete Disclosure. This Agreement (including the exhibits and
schedules attached to this Agreement) does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained herein not misleading. There is no fact known to the Seller
which is not disclosed in this Agreement which materially adversely affects the
accuracy of the representations and warranties specified in this Agreement or
the Acquired Assets. The Seller knows of no fact which has not been disclosed to
the Purchaser in writing with respect to the Acquired Assets, Liabilities,
financial condition or performance of the Seller which could reasonably be
anticipated to have a material adverse effect upon the Acquired Assets,
financial condition, operation, operating results, customer relations, employee
relations or business prospects of the Acquired Business.
4.13 No Bribes or Kickbacks. The Seller has not, directly or indirectly,
paid or delivered any fee, commission, or other money, funds, or property,
however characterized, to any person or Entity, in the United States or any
other country, and the Seller does not know and does not have reason to believe
that any conduct by the Seller, or any of its officers, directors, employees,
agents, or representatives, or any of them, is or has been illegal pursuant to
any federal, state, or local law of the United States or any other country
having jurisdiction of such conduct. Neither the Seller nor any of its officers,
directors, employees, agents, or representatives, has participated, directly or
indirectly, in any boycott or other similar practice affecting any of the actual
or potential customers of the Seller. The Seller has at all times done business
in an open and ethical manner.
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4.14 Uncollectible Receivables. All Receivables specified in the books and
records of the Seller are collectable completely in the ordinary course of the
Seller's business.
4.15 Liens on Assets and Properties. Schedule 4.15 to this Agreement,
which, by this reference, is made a part of this Section 4.15, as though
specified verbatim in this Section 4. 15, specifies a complete and accurate list
of all liens, leases, pledges, encumbrances, equities, claims pursuant to
bailment and storage requirements, charges and restrictions (except for liens,
if any, for personal property taxes not delinquent) regarding the Acquired
Assets. All of the Acquired Assets are in good operating condition, ordinary
wear and tear excepted, and are capable of utilization by the Purchaser in the
ordinary course of the Purchaser's business.
4.16 Governmental Investigations. No material investigation or review by
any governmental entity with respect to the Acquired Business or any of the
Acquired Assets or the use thereof is pending or, to the best of the knowledge
of the Seller, threatened (other than inspections and reviews customarily made
of businesses such as the Acquired Business, nor has any governmental entity
indicated to the Seller an intention to conduct the same.
4.17 Employees, Etc. Schedule 4.17 to this Agreement, which, by this
reference, is made a part of this Section 4.17, as though specified verbatim in
this Section 4.17, specifies and describes all employment and severance
agreements to which the Seller is a party. Other than as specified in that
Section 4.17, there are no collective bargaining, bonus, profit sharing,
compensation, or other plans, agreements, trusts, funds, or arrangements
maintained by the Seller for the benefit of directors, officers or employees of,
or whose principal responsibilities relate to, the Acquired Business, and there
are no employment, consulting, severance, or indemnification arrangements,
agreements, or understandings between the Seller, on the one hand, and any
current or former directors, officers or other employees (or Affiliates thereof)
of, or whose principal responsibilities relate to, the Acquired Business, on the
other hand. The Seller is not, and following the Closing will not be, obligated
by any express or implied contract or agreement to employ, directly or as a
consultant or otherwise, any person for any specific period of time or until any
specific age.
4.18 Compliance With Laws. The Acquired Business and each of the Acquired
Assets is in substantial compliance with all, and has received no notice of any
violation of any, laws or regulations applicable to its operations, including,
without limiting the generality of the foregoing, the laws and regulations
relevant to the use or utilization of premises, or with respect to which
compliance is a condition of engaging in any aspect of the business of the
Acquired Business, and the Acquired Business has all permits, licenses, zoning
rights, and other governmental authorizations necessary to conduct its business
as presently conducted. All such permits, licenses, zoning rights, and other
governmental authorizations will, as a part and consequence of the Transaction,
be transferred to the Purchaser at the Closing.
4.19 Ownership of Acquired Assets. The Seller has good, marketable and
insurable title, or valid, effective and continuing leasehold rights in the case
of leased property, to all real property (as to which, in the case of owned
property, such title is fee simple) and all personal property owned or leased by
it and comprising a part of the Acquired Assets or the Acquired
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Business, or used by it in the conduct of the Acquired Business in such a manner
as to create the appearance or reasonable expectation that the same is owned or
leased by it; such ownership is free and clear of all liens, claims,
encumbrances and charges, except liens for taxes not yet due and minor
imperfections of title and encumbrances, if any, which, singly and in the
aggregate, are not substantial in amount and do not materially detract from the
value of the property subject thereto or materially impair the use thereof; no
other person has any ownership or similar right in, or contractual or other
right to acquire any such right in, any of such assets; and such ownership will
be conveyed to the Purchaser at the Closing pursuant to the Transaction. The
Seller does not know of any potential action by any party, governmental or
other, and no proceedings with respect thereto have been instituted of which the
Seller has notice, that would materially affect the Purchaser's ability to use
and to utilize each of such assets in the business of the Acquired Business. The
Seller has received no notices from any mortgagee regarding any leased
properties of the Acquired Business, or the leasehold interest in which
comprises any part of the Acquired Assets.
4.20 Proprietary Rights. The Seller possesses full ownership of, or
adequate and enforceable long-term licenses or other rights to use (without
payment), all Proprietary Rights used in the Acquired Business or utilized in
conjunction with the Acquired Assets, and all such ownership, license or other
rights shall be conveyed to the Purchaser at the Closing pursuant to the
Transaction; the Seller has not received any notice of conflict which asserts
the rights of others with respect thereto; and Seller has in all material
respects performed all of the obligations required to be performed by it, and is
not in default in any material respect, pursuant to any agreement relating to
any such Proprietary Right.
4.21 Trade Names. Schedule 4.21 to this Agreement, which, by this
reference, is made a part of this Section 4.21, as though specified verbatim in
this Section 4.21, specifies accurately and completely each trade name,
fictitious business name, or other similar name pursuant to which the Seller has
conducted any part of the Acquired Business or in which the Seller and each of
its predecessors has utilized any of the Acquired Assets during the ten (10)
years preceding the date of this Agreement.
4.22 Employee Benefit Plans.
4.22.1 The Seller does not maintain or contribute to any Pension Plan
or any Welfare Plan, nor is the Seller presently, nor has it been within
the last six (6) years, a participating employer in any Multiemployer Plan,
affecting, in any case, employees of the Acquired Business or employees of
the Seller whose principal activities relate to the Acquired Business.
4.22.2 All Pension Plans and Welfare Plans of the Seller affecting
employees of the Acquired Business or employees of the Seller whose
principal activities relate to the Acquired Business, have been
administered in substantial compliance with their terms, ERISA and, where
applicable, the Code. The IRS has issued a favorable determination letter
with respect to the qualification of each such Pension Plan and the
exemption of any corresponding trust. A copy of the
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most recent determination letter for each such Pension Plan has been
furnished to Purchaser, and nothing has occurred since the date of any such
determination letter that could cause the relevant Pension Plan or trust to
lose such qualification or exemption.
4.22.3 With respect to each Pension Plan or Welfare Plan affecting
employees of the Acquired Business or employees of the Seller whose
principal activities relate to the Acquired Business: (i) there is no fact,
including, without limitation, any Reportable Event, that exists that would
constitute grounds for termination of such Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such plan, in each case as contemplated by ERISA; (ii) neither
the Seller nor any fiduciary, trustee or administrator of any such Pension
Plan or Welfare Plan, has engaged in a Prohibited Transaction that could
subject the Seller to any material tax or any material penalty imposed by
ERISA or the Code; (iii) the Seller has not incurred any material liability
to the PBGC (other than for payment of premiums); and (iv) there is no
material Accumulated Funding Deficiency with respect to any Pension Plan,
whether or not waived.
4.22.4 There has been no Plan Termination that has occurred during the
five-year period ending on the date of this Agreement affecting employees
of the Acquired Business or employees of the Seller whose principal
activities relate to the Acquired Business.
4.22.5 The Seller has no any knowledge of any material liability being
incurred under Title IV of ERISA by the Seller with respect to any Pension
Plan maintained by a trade or business (whether or not incorporated) which
is under common control with, or part of a controlled group of corporations
with, the Seller, within the meaning of Sections 414(b) or (c) of the Code
and affecting employees of the Acquired Business or employees of the Seller
whose principal activities relate to the Acquired Business.
4.22.6 No Welfare Plan affecting employees of the Acquired Business or
employees of the Seller whose principal activities relate to the Acquired
Business is funded with a trust or other funding vehicle, other than
insurance policies.
4.22.7 There has occurred no Complete Withdrawal or Partial Withdrawal
with respect to any Multiemployer Plan affecting employees of the Acquired
Business or employees of the Seller whose principal activities relate to
the Acquired Business that could cause the Acquired Business or any part
thereof or any of the Acquired Assets to be exposed or subjected to any
material liability, or any lien or similar charge in relation to any
liability, pursuant to or as a result of ERISA and all payments required to
be made to any such Plan by the Seller under any applicable collective
bargaining agreements have been made.
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4.23 Acquired Facilities. The Acquired Facilities are (as to physical plant
and structure) structurally sound and none of the Acquired Facilities, nor any
of the vehicles or other equipment used by the Acquired Business in connection
with its business, has any material defects and all of them are in all material
respects in good operating condition and repair and are adequate for the uses to
which they are being put; none of such Acquired Facilities, vehicles or other
equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs which are not material in nature or cost. The Seller is
not in breach, violation or default of any lease affecting the Acquired Business
or the Acquired Assets with respect to, or as a result of, which the other party
(whether lessor, lessee, sublessor, or sublessee) thereto has the right to
terminate such lease, and the Seller has not received notice of any claim or
assertion that it is or may be in any such breach, violation or default.
4.24 Contracts. The Acquired Assets and the Acquired Business are not
parties to or affected by any contracts, agreements or understandings, whether
express or implied, written or verbal; provided, however, that the Acquired
Assets or the Acquired Business may be parties to or affected by any such
contracts, agreements, or understandings that fall into one of the following
categories: (a) those that are terminable on notice of less than thirty-two (32)
days and do not involve payments or obligations of more than Two Thousand Five
Hundred Dollars ($2,500.00) in any period of thirty-one (31) days or less (on
termination or otherwise); or (b) those that involve aggregate payment or
obligation remaining unpaid as of the date of the Agreement of less than Ten
Thousand Dollars ($10,000.00). The Seller is not a party to any executory
contract to sell or transfer any part of any leasehold interest included in the
Acquired Assets or utilized by the Acquired Business. True and accurate copies
of all such leases, and of all amendments, supplements, extensions and
modifications thereof, have heretofore been delivered to the Purchaser by the
Seller.
4.25 Accounts Payable. The accounts payable presented on the books of the
Seller at the time of the Closing will present all amounts owed by the Seller in
respect of trade accounts due and other Payables of the Acquired Business or
relating to the Acquired Assets, and the actual Liability of the Seller in
respect of such obligations was not, and will not be, on any of such dates, in
excess of the amounts so presented on the balance sheets or the books of the
Acquired Business, as the case may be.
4.26 Labor Matters. There are no activities or controversies, including,
but not limited to, any labor organizing activities, election petitions or
proceedings, proceedings preparatory thereto, unfair labor practice complaints,
labor strikes, disputes, slowdowns, or work stoppages, pending or, to the best
of the knowledge of the Seller, threatened, affecting employees of the Acquired
Business or employees of the Seller.
4.27 Insurance. Schedule 4.27 to this Agreement, which, by this reference,
is made a part of this Section 4.27, as though specified verbatim in this
Section 4.27, is a complete and accurate description of all insurance policies
maintained by the Seller, which are in full force and effect and which insure
the Acquired Business, and such insurance policies provide for coverages which
are usual and customary in the business of the Acquired Business as to amount
and scope, and are adequate to protect the Acquired Business against any
reasonably foreseeable
16
risk of loss, including business interruption. The Seller has not within the
past three (3) years received any notice of cancellation of any insurance
agreement affecting the Acquired Assets or the Acquired Business.
ARTICLE V
COVENANTS OF THE PURCHASER
The Purchaser hereby affords the Seller the following covenants, thereby
agreeing to do or not to do, as the case may be, the following, the fulfillment
of each of which shall constitute a condition precedent to the obligations of
the Seller created by the provisions of this Agreement.
5.1 Affirmative Covenants. From the date of this Agreement through the
Closing Date, the Purchaser will take every action reasonably required of it in
order to satisfy the conditions to Closing specified in this Agreement and
otherwise to ensure the prompt and expedient consummation of the Transaction
substantially as contemplated by this Agreement, and will exert all reasonable
efforts to cause the Transaction to be consummated, provided in all instances
that the representations and warranties of the Seller in this Agreement are and
remain true and accurate and that the covenants and agreements of the Seller in
this Agreement are performed and that the conditions to the obligations of the
Purchaser specified in this Agreement are not incapable of satisfaction.
5.2 Cooperation. The Purchaser shall cooperate with the Seller and its
counsel, accountants and agents in every way in consummating the Transaction,
and in delivering all documents and instruments deemed reasonably necessary or
useful by the Seller.
5.3 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Purchaser in connection with this Agreement and the
Transaction shall be paid by the Purchaser.
5.4 Publicity. Prior to the Closing any written news releases by the
Purchaser pertaining to this Agreement or the Transaction shall be submitted to
the Seller for review and approval prior to release by the Purchaser, and shall
be released only in a form approved by the Seller; provided, however, that (a)
such approval shall not be unreasonably withheld, and (b) such review and
approval shall not be required of releases by the Purchaser, if prior review and
approval would prevent the timely and accurate dissemination of such press
release as required to comply, in the judgment of counsel, with any applicable
law, rule or policy.
5.5 Updating of Exhibits and Schedules. The Purchaser shall notify the
Seller of any changes, additions or events which may cause any change in or
addition to any schedules or exhibits delivered by it pursuant to this
Agreement, promptly after the occurrence of the same and at the Closing by the
delivery of updates of all schedules and exhibits. No notification made pursuant
to this section shall be deemed to cure any breach of any representation or
warranty made in this Agreement, unless the Seller specifically agrees thereto
in writing nor shall any such notification be considered to constitute or result
in a waiver by the Seller of any condition
17
specified in this Agreement.
5.6 Confidential Information. Unless and until the Closing has been
consummated, the Purchaser and its representatives will hold in strict
confidence, and will not use to the detriment of the Seller any data and
information with respect to the business of the Seller obtained in connection
with this Agreement. If the Transaction is not consummated, the Purchaser will
return to the Seller all that data and information that the Seller may
reasonably request, including, but not limited to, worksheets, test reports,
manuals, lists, memoranda, and other documents prepared by or made available to
the Purchaser in connection with the Transaction.
ARTICLE VI
COVENANTS OF THE SELLER
The Seller hereby affords the Purchaser the following covenants, thereby
agreeing to do or not to do, as the case may be, the following, the fulfillment
of each of which shall constitute a condition precedent to the obligations of
the Purchaser created by the provisions of this Agreement.
6.1 Affirmative Covenants. From the date of this Agreement through the
Closing Date, the Seller will take every action reasonably required of it to
satisfy the conditions to closing specified in this Agreement and otherwise to
ensure the prompt and expedient consummation of the Transaction substantially as
contemplated by the provisions of this Agreement, and will exert all reasonable
efforts to cause the Transaction to be consummated, provided in all instances
that the representations and warranties of the Purchaser in this Agreement are
and remain true and accurate and that the covenants and agreements of the
Purchaser in this Agreement are performed and that the conditions to the
obligations of the Seller specified in this Agreement are not incapable of
satisfaction and subject, at all times, to the right and ability of the
directors of the Seller to satisfy their fiduciary obligations.
6.2 Name. The Seller agrees that following consummation of the Transaction,
neither it nor any Entity under its control or affiliated with it shall make any
attempt to make any use of any name pursuant to which the Acquired Business has
conducted business, or authorize others to do so, without the consent of the
Purchaser.
6.3 Access and Information. The Seller shall afford to the Purchaser and to
the Purchaser's representatives reasonable access during normal business hours
throughout the period prior to the Closing to all of its properties, books,
contracts, commitments, records, including, but not limited to, tax returns, and
personnel relating to the Acquired Assets or the Acquired Business and, during
such period, the Seller shall furnish promptly to the Purchaser (a) all written
communications to its directors or to its shareholders generally relating to the
Acquired Assets or the Acquired Business, (b) internal monthly financial
statements the Acquired Business when and as available, and (c) all other
information relating to the Acquired Assets or the Acquired Business as the
Purchaser may reasonably request, but no investigation pursuant to this section
shall affect any representations or warranties of the Seller, or the conditions
to the obligations of the Purchaser to consummate the Transaction specified by
the provisions of this Agreement. In the event of the termination of this
18
Agreement, the Purchaser will, and will cause its representatives to, deliver to
the Seller or destroy all documents, work papers, and other material, and all
copies thereof, obtained by it or on its behalf from the Seller as a result of
this Agreement or in connection herewith, whether so obtained before or after
the execution hereof, and will hold in confidence all confidential information
that has been designated as such by the Seller in writing or by appropriate and
obvious notation, and will not use any such confidential information except in
connection with the Transaction, until such time as such information is
otherwise publicly available. Purchaser and its representatives shall assert
their rights created by this section in such manner as to minimize interference
with the business of the Seller.
6.4 No Solicitation. The Seller and those persons and Entities acting on
behalf of any of Seller will not, and the Seller will use its best efforts to
cause its officers, employees, agents, and representatives (including any
investment banker) not, directly or indirectly, to solicit, encourage, or
initiate any discussions with, or negotiate or otherwise deal with, or provide
any information to, any person or Entity, other than the Purchaser and its
officers, employees, and agents, relating to the Acquired Assets or the Acquired
Business. The Seller will notify the Purchaser immediately upon receipt of any
inquiry, offer or proposal relating to any of the foregoing. None of the
foregoing shall prohibit providing information to others in a manner in keeping
with the ordinary conduct of the Seller's business, or providing information to
government authorities.
6.5 Conduct of Acquired Business Pending the Transaction. Prior to the
consummation of the Transaction or the termination of this Agreement pursuant to
its terms, unless the Purchaser shall otherwise consent in writing, which
consent shall not be unreasonably withheld or delayed, and except as otherwise
contemplated by this Agreement, the Seller will comply with each of the
following:
6.5.1 The Acquired Business, and the other businesses of the Seller
that relate to, use or affect the Acquired Assets, if any, will be
conducted only in the ordinary and usual course, the Seller shall use
reasonable efforts to keep intact the business organization and goodwill of
the Acquired Business, keep available the services of the employees of the
Acquired Business and of the employees of the Seller whose principal
activities relate to the Acquired Business and maintain good relationships
with suppliers, lenders, creditors, distributors, employees, customers and
others having business or financial relationships with the Acquired
Business, and it shall immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the ordinary and usual
course of business of, the Acquired Business or affecting any material part
of the Acquired Assets.
6.5.2 The Seller shall not shall create, incur or assume any long-term
or short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, affecting the Acquired
Business or any of the Acquired Assets.
6.5.3 The Seller shall not (a) adopt, enter into, or amend any bonus,
profit sharing, compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination, or other
employee benefit plan, agreement, trust fund, or arrangement for the
benefit or welfare of any employees of the Acquired Business or
19
employees of the Seller, or (b) agree to any material (in relation to
historical compensation) increase in the compensation payable or to become
payable to, or any increase in the contractual term of employment of, any
such employee except, with respect to employees who are not officers or
directors, in the ordinary course of business in accordance with past
practice.
6.5.4 The Seller shall not sell, lease, mortgage, encumber, or
otherwise dispose of or grant any interest in any of the Acquired Assets
except for liens for taxes not yet due or liens or encumbrances that are
not material in amount or effect and do not impair the use of the Acquired
Assets, or as specifically provided for or permitted in this Agreement.
6.5.5 The Seller shall not enter into, or terminate, any material
contract, agreement, commitment, or understanding relating to or affecting
the Acquired Assets or the Acquired Business.
6.5.6 The Seller shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to any of the
matters referred to in Paragraphs 6.5.1 through 6.5.5, inclusive, of this
Section 6.5.
6.5.7 The Seller shall continue properly and promptly to file when due
all federal, state, local, foreign, and other tax returns, reports, and
declarations required to be filed by it relating to the Acquired Assets or
the Acquired Business, and will pay, or make full and adequate provision
for the payment of, all taxes and governmental charges due from or payable
by it relating to the Acquired Assets or the Acquired Business.
6.5.8 The Seller shall comply with all laws and regulations applicable
to the operations of the Acquired Business and the utilization of the
Acquired Assets.
6.5.9 The Seller shall maintain in full force and effect insurance
coverage relating to the Acquired Assets or the Acquired Business of a type
and amount customary in the business of the Acquired Business (but not less
than that presently in effect).
6.6 Cooperation. The Seller will cooperate with the Purchaser and its
agents in every way in consummating the Transaction and in delivering all
documents and instruments deemed reasonably necessary or useful by the
Purchaser.
6.7 Seller's Acquisition Intention. The Consideration will be acquired by
the Seller (a) for the Seller's own account as a principal and not as a nominee
or as an agent; (b) for investment purposes only; and (c) with no contemplation
of, or for resale regarding, any distribution or public offering of all or any
portion of the Consideration within the meaning of the Securities Act. The
Seller has no intention, agreement or arrangement to divide the Consideration
with any other person or Entity or to sell, assign, transfer, convey or
otherwise dispose of all or any part of the Consideration unless and until the
Seller determines, at some future date, changed circumstances, not in
contemplation at the time of the acquisition of the Consideration, make such
disposition advisable.
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6.8 Exemption from Registration. The Seller understands that the
Consideration (a) has not been registered pursuant to the provisions of the
Securities Act by reason of the issuance of the Subject Stock in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to the provisions of Section 4(2) and Section 4(6) of
the Securities Act and the rules and regulations promulgated pursuant thereto;
(b) must be held by the Seller indefinitely, unless a subsequent disposition of
the Consideration is registered pursuant to the provisions of the Securities Act
or is exempt from such registration; and (c) has not been qualified pursuant to
the requirements of the applicable state securities laws ("Blue Sky Law") by
reason of the issuance of the Consideration in a transaction exempt from the
registration and qualification requirements of the Blue Sky Law. the rules and
regulations promulgated pursuant thereto.
6.9 Seller's Financial and Business Experience. By reason of the Seller's
financial and business experience, the Seller could be assumed reasonably to
have the capacity to protect the Seller's own interests in the Transaction.
6.10 Material and Information about the Purchaser. The Seller has had
access to such material and information about the Purchaser, the Purchaser's
financial condition and the Purchaser's business prospects as the Seller has
requested reasonably.
6.11 No Advertising. The Seller has not been furnished with any advertising
or offering literature regarding the acquisition of the Consideration.
6.12 Response to Inquiries. The officers and directors of the Purchaser
have answered all inquiries the Seller has asked of such officers and directors
concerning the Seller and the Purchaser's proposed activities and all other
matters regarding the acquisition of the Consideration.
6.13 Evaluation of Risks. The Seller has such knowledge and experience in
business and financial matters that the Seller is capable of evaluating the
Purchaser and the proposed activities thereof, the risks and merits of the
Consideration and of making an informed decision thereon, and the Seller is not
utilizing any other person regarding the evaluation of those risks and merits.
6.14 Continued Action Regarding Exemption. The Seller shall take any and
all additional action which is necessary or appropriate to maintain the
exemptions from registration and qualification provided by Section 4(2) and
Section 4(6) of the Securities Act and similar or applicable provisions of the
Blue Sky Law.
6.15 Negotiations with Other Persons. The Seller will not initiate,
encourage the initiation by any other person, or participate in any discussions
or negotiations with any other persons relating to the sale or other disposition
of any of the Acquired Assets, and will promptly notify the Purchaser if any
person initiates such discussions or negotiations with the Seller.
21
6.16 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Seller in connection with this Agreement and the
Transaction shall be paid by the Seller.
6.17 Publicity. Prior to the Closing any written news releases by the
Seller pertaining to this Agreement or the Transaction shall be submitted to the
Purchaser for review and approval prior to release by the Seller, and shall be
released only in a form approved by the Purchaser; provided, however, that (1)
such approval shall not be unreasonably withheld and (2) such review and
approval shall not be fired of releases by the Seller if prior review and
approval would prevent the timely and accurate dissemination of such press
release required to comply, in the judgment of counsel, with any applicable rule
or policy.
6.18 Updating of Exhibits and Schedules. The Seller shall notify the
Purchaser of any changes, additions, or events which cause any change in or
addition to any schedules or exhibits delivered by it pursuant to the provisions
of this Agreement promptly after the occurrence of the same and again at the
Closing by delivery of appropriate updates to all such schedules and exhibits.
No such notification made pursuant to this section shall be deemed to cure any
breach of any representation or warranty such notification be considered by the
Purchaser of any
6.19 Payment of Unassumed Liabilities. The Seller agrees promptly to pay
when due, or otherwise to discharge, without cost or expense to the Purchaser,
each and every Liability of the Seller that it specifically assumed by the
Purchaser pursuant to this Agreement, as described in Section 2.1 of this
Agreement.
6.20 Further Assurances. On the Closing, the Seller shall deliver to the
Purchaser such additional instruments and documents as may be reasonably
necessary to close and consummate the Transaction and to evidence a fulfillment
of the obligations of the Seller specified by the provisions of this Agreement
and exhibits and schedules to this Agreement and the performance by the Seller
in all material respects of all conditions to the consummation of the
Transaction.
6.21 Taxes. The Seller has properly filed or caused to be filed all
federal, state, local, and foreign income and other tax returns, reports, and
declarations that are required by applicable law to be filed by it and that
relate to or in any way affect the Acquired Business or the Acquired Assets, and
has paid, or made full and adequate provision for the payment of, all federal,
state, local, and foreign income and other taxes properly due for the periods
covered by such returns, reports, and declarations.
6.22 Full Disclosure. The documents, certificates, and other writings
furnished or to be furnished by or on behalf of the Seller to the Purchaser
pursuant to the provisions of this Agreement, taken together in the aggregate,
do not and will not contain any untrue statement of a material fact, or omit to
state any material fact necessary to make the statements made, in the light of
the circumstances under which they are made, not misleading.
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ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Purchaser. The obligations of the
Purchaser to purchase the Acquired Assets are subject to the satisfaction, at or
before the Closing, of all the conditions specified below in this Section 7.1.
The Purchaser may waive any or all of those conditions, in whole or in part,
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by the Purchaser of any of its other rights or
remedies, at law or in equity, if the Seller shall be in default of any of its
representations, warranties, or covenants specified by the provisions of this
Agreement.
7.1.1 This Agreement and the Transaction shall have received all
approvals, consents, authorizations, and waivers from governmental and
other regulatory agencies and other third parties, including lenders,
holders of debt securities and lessors, required to consummate the
Transaction.
7.1.2 There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state court which prohibits the
consummation of the Transaction.
7.1.3 The Seller shall have performed in all material respects each of
its agreements and obligations specified by the provisions of this
Agreement and required to be performed on or prior to the Closing and shall
have complied with all material requirements, rules, and regulations of all
regulatory authorities having jurisdiction relating to the Transaction.
7.1.4 No material adverse change shall, in the reasonable judgment of
the Purchaser, have taken place in the business, condition, financial or
otherwise, operations, or prospects of the Acquired Business or the
Acquired Assets since the date of this Agreement other than those, if any,
that result from the changes permitted by this Agreement.
7. 1.5 The representations and warranties of the Seller specified in
this Agreement shall be true in all material respects as of the date of
this Agreement and, except in such respects as, in the reasonable judgment
of the Purchaser, do not materially and adversely affect the business,
condition, financial or otherwise, operations, or prospects of the Acquired
Business or the Acquired Assets, as of the Closing Time as if made as of
such time.
7.1.6 The Purchaser shall have received from the Seller an officer's
certificate, executed by the Chief Executive Officer and the Chief
Financial Officer of the Seller, in their capacities as such, dated the
Closing Date, as to the satisfaction of the conditions in Paragraphs 7.1.3,
7.1.4, and 7.1.5 of this Agreement.
7.1.7 Purchaser shall have received from each lessor or lessee with
whom the Seller has a material (as reasonably determined by the Purchaser)
lease of real property,
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which lease or real property comprises part of the Acquired Assets,
certificates satisfactory in form and substance to the Purchaser as to the
continuing validity of such leases and the absence of any basis for the
termination thereof.
7.1.8 The number of shares of common stock of the Seller held by
persons who have evidenced an intent to exercise dissenters' rights of
appraisal, if such rights are available to them, shall not be in excess of
five percent (5 %) of the outstanding shares of the common stock of the
Seller.
7.1.9 No governmental agency or private party shall have threatened or
instituted any action, suit or proceeding before any court or
administrative body which seeks to enjoin, questions the legality of, or
may materially and adversely affect such transaction.
7.1.10 There shall exist no conditions, restrictions or reservations
affecting the title to or utility of Acquired Assets, including any
assignment of any lease, which would prevent the Purchaser from occupying
and utilizing the Purchaser's assets, or any portion thereof, to the same
full extent that Seller might continue to do if the Transaction did not
occur.
7.1.11 The Purchaser shall have received such additional instruments
and documents as may be reasonably necessary to close and consummate the
Transaction and to evidence the fulfillment by the Seller of the agreements
of the Seller specified by the provisions of this Agreement and the
exhibits to this Agreement and the performance in all material respects of
all conditions to the consummation of the Transaction.
7.2 Conditions to Obligation of the Seller. The obligations of the Seller
to issue, sell, assign, transfer, convey and deliver the Acquired Assets are
subject to the satisfaction, at or before the Closing, of all the following
conditions. The Seller may waive any or all of these conditions in whole or in
part without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by the Seller of any of its other rights or remedies,
at law or in equity, if the Purchaser should be in default of any of its
representations, warranties, or covenants specified by the provisions of this
Agreement.
7.2.1 This Agreement and the Transaction shall have received all
approvals, consents, authorizations, and waivers from governmental and
other regulatory agencies and other third parties, including lenders,
holders of debt securities, lessors, and the shareholders of the Seller,
required by law to consummate the Transaction.
7.2.2 There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state authority which prohibits
the consummation of the Transaction.
7.2.3 The Purchaser shall have performed in all material respects its
agreements and obligations specified by the provisions of this Agreement
required to be performed on or prior to the Closing.
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7.2.4 The representations and warranties of the Purchaser specified in
this Agreement shall be true in all material respects as of the date of
this Agreement and, except in such respects as do not materially and
adversely affect the business of the Purchaser, taken as a whole, as of the
Closing Date as if made as of such time.
7.2.5 The Seller shall have received from the Purchaser an officers'
certificate, executed by the Chief Financial Officer and the Chief
Executive Officer of the Purchaser, in their capacities as such, dated the
Closing Date, as to the satisfaction of the conditions of Paragraphs 7.2.3
and 7.2.4 of this Agreement.
7.3 Documents to be Delivered at Closing.
7.3.1 Purchaser to the Seller. On the Closing Date, the Purchaser
shall deliver the following instruments and documents to the Seller.
7.3.1.1 Certificate Representing the Consideration.
7.3.1.2 Officers' certificate pursuant to the provisions of
Paragraph 7.2.5 of this Agreement.
7.3.2 Seller to the Purchaser. On the Closing Date, the Seller shall
deliver to the Purchaser the following instruments and documents:
7.3.2.1 A ▇▇▇▇ of Sale, executed by the President and the
Secretary of the Seller, pursuant to which title to the Acquired
Assets is transferred to and vested in the Purchaser.
7.3.2.2 All consents necessary to the Transaction.
7.3.2.3 Officers' certificate pursuant to the provisions of
Paragraph 7.1.6 of this Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification By the Seller. The Seller shall defend, indemnify and
hold harmless the Purchaser, its officers, directors, stockholders,
representatives, agents, accountants, attorneys, servants and employees, and
their respective heirs, personal and legal representatives, guardians,
successors and assigns, from and against any and all claims, threats,
liabilities, taxes, interest, fines, penalties, suits, actions, proceedings,
demands, damages, losses, costs and expenses (including attorneys and experts'
fees and court costs) of every kind and nature arising out of, resulting from,
or in connection with:
8.1.1. Any misrepresentation or breach by the Seller of any
representation or warranty specified in this Agreement.
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8.1.2. Any nonfulfillment, failure to comply or breach by the Seller
of or with any covenant, promise or agreement of the Seller specified in
this Agreement.
8.1.3. Any act, matter or thing prior to the Closing Date.
8.2. Indemnification by the Purchaser. The Purchaser shall defend,
indemnify and hold harmless the Seller and its respective heirs, personal and
legal representatives, guardians, successors and assigns, from and against any
and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including
attorneys' and experts' fees and court costs) of every kind and nature arising
out of, resulting from, or in connection with:
8.2.1. Any misrepresentation, omission or breach by the Purchaser of
any representation or warranty specified in this Agreement.
8.2.2. Any nonfulfillment, failure to comply or breach by the
Purchaser of or with any covenant, promise or agreement of the Purchaser
specified in this Agreement.
ARTICLE IX
SECURITIES AND SECURITY HOLDERS
9.1 Meeting of Shareholders. As soon as practicable after the execution of
this Agreement, the Seller will, in conjunction with the Purchaser, commence
activities toward soliciting from the shareholders of the Seller written
consents of such shareholders of the Transaction. Such activities shall include,
without limitation, preparation of the a written consent statement ("Consent
Statement"); establishing the date for shareholders entitled to consent
regarding the Transaction; complying with applicable legal requirements pursuant
to state law and the Exchange Act, if applicable, regarding the giving of notice
as to such date; mailing a Consent Statement and consent form (ballot) to
shareholders; and in all other respects taking all action required by law to
authorize the consummation of the Transaction insofar as authorization thereof
by shareholders is required.
9.2 Consent Statement. The Consent Statement, including, but not limited
to, the contents thereof, and the timing and manner of use thereof, will comply
with all requirements of the Exchange Act, if applicable, and of any state law
applicable thereto, and, without limiting the foregoing, will not, at the time
the same is mailed to shareholders, contain any untrue statement of a material
fact regarding the Seller or omit to state any material fact necessary to make
the statements regarding the Seller therein, considering the circumstances
pursuant to which they are made, not misleading.
ARTICLE X
TERMINATION, AMENDMENT, WAIVER
10.1 Termination. This Agreement and the Transaction may be terminated at
any time prior to the Closing, whether before or after any approval by
shareholders:
10.1.1 By mutual consent of the Purchaser and the Seller; or
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10.1.2 By either Purchaser or the Seller, upon written notice to the
other, if the conditions to such party's obligations to consummate the
Transaction, in the case of Purchaser, as specified in Section 7.1 of this
Agreement, or, in the case of the Seller, as specified in Section 7.2 of
this Agreement, were not, or cannot reasonably be, satisfied on or before
October 31, 1998, unless the failure of condition is the result of the
material breach of this Agreement by the party seeking to terminate.
10.2 Amendment. This Agreement may be amended by the Seller and the
Purchaser by action taken at any time, but after the Transaction has been
approved by the shareholders of the Seller no amendment shall be made which
materially reduces the Consideration or which in any way materially and
adversely affects the rights of the Seller or its shareholders without the
further approval of such shareholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of the Seller and the Purchaser.
10.3 Waiver. At any time prior to the Closing Date, the Purchaser or the
Seller, by action taken by their respective Boards of Directors may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or (c)
waive compliance with any of the agreements or conditions specified by the
provisions of this Agreement. Any agreement on the part of a party to this
Agreement to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE XII
GENERAL PROVISIONS
11.1. Notices. Any notice, direction or instrument required or permitted to
be given pursuant to this Agreement shall be given in writing by (a) telegram,
facsimile transmission or similar method, if confirmed by mail as herein
provided, by mail; (b) if mailed postage prepaid, by certified mail, return
receipt requested; or (iii) hand delivery to any party at the addresses of the
parties specified, below. If given by telegram or facsimile transmission or
similar method or by hand delivery, such notice, direction or instrument shall
be deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the second (2nd) business
day following the day after which it was mailed. Any party may, from time to
time by similar notice, give notice of any change of address, and in such event,
the address of such party shall be deemed to be changed accordingly. The
address, telephone number and facsimile transmission number for the notice of
each party are:
If to Seller: Fenway Resources Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Purchaser: Nevada/Utah Gold, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
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11.2. Recovery of Enforcement Costs. In the event any party shall institute
any action or proceeding to enforce any provision of this Agreement to seek
relief from any violation of this Agreement, or to otherwise obtain any judgment
or order relating to or arising from the subject matter of this Agreement, each
prevailing party shall be entitled to receive from each losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding.
11.3. Assignment. No party shall have the right, without the consent of the
other party, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's rights or obligations created by the provisions of this
Agreement, nor shall the parties' rights be subject to encumbrance or the claim
of creditors. Any such purported assignment, transfer, or delegation shall be
null and void.
11.4. Captions and Interpretations. Captions of the articles, sections and
paragraphs of this Agreement are for convenience and reference only, and the
works specified therein shall in no way be held to explain, modify, amplify or
aid in the interpretation, construction, or meaning of the provisions of this
Agreement. The language in all parts to this Agreement, in all cases, shall be
construed in accordance with the fair meaning of that language as if prepared by
all parties and not strictly for or against any party. Each party and counsel
for such party have reviewed this Agreement. The rule of construction, which
requires a court to resolve any ambiguities against the drafting party, shall
not apply in interpreting the provisions of this Agreement.
11.5 Entire Agreement. This Agreement and the exhibits to this Agreement
are the final written expression and the complete and exclusive statement of all
the agreements, conditions, promises, representations, warranties and covenants
between the parties with respect to the subject matter of this Agreement, and
this Agreement supersedes all prior or contemporaneous agreements, negotiations,
representations, warranties, covenants, understandings and discussions by and
between and among the parties, their respective representatives, and any other
person, with respect to the subject matter specified in this Agreement. No
provision of any exhibit or schedule to this Agreement shall supersede or annul
the terms and provisions of this Agreement, unless the matter specified in such
exhibit or schedule shall explicitly so provide to the contrary, in the event of
ambiguity in meaning or understanding between the provisions of this Agreement
proper and the appended exhibits or schedules, the provisions of this Agreement
shall prevail and control in all instances.
11.6 Choice of Law and Consent to Jurisdiction. This Agreement shall be
deemed to have been entered into in the State of Nevada. All questions
concerning the validity, interpretation, or performance of any of the terms,
conditions and provisions of this Agreement or of any of the rights or
obligations of the parties shall be governed by, and resolved in accordance
with, the laws of the State of Nevada without regard to conflicts of law
principles.
11.7 Number and Gender. Whenever the singular number is used in this
Agreement and, when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa.
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11.8 Successors and Assigns. This Agreement and each of its provisions
shall obligate the heirs, executors, administrators, successors, and assigns of
each of the parties. Nothing specified in this article, however, shall be a
consent to the assignment or delegation by any party of such party's respective
rights and obligations created by the provisions of this Agreement.
11.9 Third Party Beneficiaries. Except as expressly specified by the
provisions of this Agreement, this Agreement shall not be construed to confer
upon or give to any person, other than the parties hereto, any right, remedy or
claim pursuant to, or by reason of, this Agreement or of any term or condition
of this Agreement.
11.10 Severability. In the event any part of this Agreement, for any
reason, is determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated. It
is hereby declared the intention of the parties that they would have executed
the remaining portion of this Agreement without including any such part, parts,
or portion which, for any reason, may be hereafter determined to be invalid.
11.11 Governmental Rules and Regulations. The transactions contemplated by
the provisions of this Agreement are and shall remain subject to any and all
present and future orders, rules and regulations of any duly constituted
authority having jurisdiction of that transaction.
11.12 Execution in Counterparts. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution. All of the signatures
of the parties may be affixed to one copy or to separate copies of this
Agreement and when all such copies are received and signed by all the parties,
those copies shall constitute one agreement which is not otherwise separable or
divisible. Counsel for the Purchaser shall keep all of such signed copies and
shall conform one copy to show all of those signatures and the dates thereof and
shall mail a copy of such conformed copy to each of the parties within thirty
(30) days after the receipt by such counsel of the last signed copy, and such
counsel shall cause one such conformed copy to be filed in the principal office
of such counsel.
11.13 Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect of diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions and terms
specified in this Agreement shall be deemed to have been waived by any act or
knowledge of any party, its agents, trustees, officers, or employees and any
such waiver shall be made only by an instrument in writing, signed by the
waiving party and directed to any non-waiving party specifying such waiver, and
each party reserves such party's rights to insist upon strict compliance
herewith at all times.
29
11.14 Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other party to enter into and
execute this Agreement. The representations, warranties, and covenants specified
in this Agreement shall survive the Closing and shall survive any investigation
by either party whether before or after the execution of this Agreement. The
covenants, representations, and warranties of the Seller and the Purchaser are
made only to and for the benefit of the other and shall not create or vest
rights in other persons.
11.15 Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. the termination of this Agreement for any reason
whatsoever shall not prejudice any right or remedy which any party may have,
either at law, in equity, or pursuant to the provisions of this Agreement.
11.16 De Minimis Claims. No party to this Agreement shall bring any action
against the other party with respect to the subject matter of this Agreement
unless the aggregate amount of all claims so brought in relation to the subject
matter of this Agreement exceeds One Hundred Thousand Dollars ($100,000.00);
provided, however, that the foregoing shall not prevent or preclude actions
seeking injunctive or other equitable forms of relief.
11.17 Force Majeure. a. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of the
event of "force majeure" with reasonably complete particulars concerning such
event; thereupon, the obligations of the party giving such notice, so far as
those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable.
b. The requirement that an event of "force majeure" shall be remedied with
all reasonable dispatch as hereinabove specified, shall not require the
settlement of strikes, lockouts or other labor difficulties by the party
involved, contrary to such party's wishes, and the resolution of any and all
such difficulties shall be handled entirely within the discretion of the party
concerned.
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c. The term "force majeure" as used herein shall be defined as and mean any
act of God, strike, civil disturbance, lockout or other industrial disturbance,
act of the public enemy, war, blockage, public riot, earthquake, tornado,
hurricane, lightening, fire, epidemics, quarantine restrictions, public
demonstration, storm, flood, explosion, freight embargoes, governmental action,
governmental delay, restraint or inaction, unavailability of equipment, default
of a party's subcontractors or suppliers, and any other cause or event, whether
of the kind enumerated specifically herein, or otherwise, which is not
reasonably within the control of the party claiming such suspension.
11.18 Consent to Agreement. By executing this Agreement, each party, for
itself represents such party has read or caused to be read this Agreement in all
particulars, and consents to the rights, conditions, duties and responsibilities
imposed upon such party as specified in this Agreement. Each party represents,
warrants and covenants that such party executes and delivers this Agreement of
its own free will and with no threat, undue influence, menace, coercion or
duress, whether economic or physical. Moreover, each party represents, warrants,
and covenants that such party executes this Agreement acting on such party's own
independent judgment.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed
on the date first written above by their respective officers thereunto duly
authorized.
The Purchaser:
Nevada/Utah Gold, Inc.,
a Nevada corporation
By: /s/ [ILLEGIBLE]
-------------------------
Its: President
By: /s/ [ILLEGIBLE]
-------------------------
Its: Secretary
The Seller:
Fenway Resources Ltd.,
a Delaware corporation
By: /s/ [ILLEGIBLE]
-------------------------
Its: President
By: /s/ [ILLEGIBLE]
-------------------------
Its: Secretary
31