EXHIBIT 2.1
PLAN AND AGREEMENT OF SHARE EXCHANGE
by and between
ADMIRALTY CORPORATION,
RUBY MINING COMPANY,
and
U.S. ENERGY CORP.
Dated as of March 2, 2001
TABLE OF CONTENTS
Page
ARTICLE I
TRANSACTIONS AND TERMS OF SHARE EXCHANGE
Section 1.01. Share Exchange...................................................1
Section 1.02. Time and Place of Closing........................................1
Section 1.03. Effective Time...................................................2
ARTICLE II
TERMS OF SHARE EXCHANGE
Section 2.01. Articles of Incorporation........................................2
Section 2.02. Bylaws...........................................................2
Section 2.03. Officers and Directors...........................................2
Section 2.04. Tax-Free Reorganization..........................................2
ARTICLE III
MANNER OF CONVERTING SHARES
Section 3.01. Share Exchange Consideration.....................................2
Section 3.02. Conversion of Shares.............................................2
Section 3.03. Shares Held by Admiralty.........................................3
Section 3.04. Fractional Shares................................................3
Section 3.05. Stock Options....................................................3
ARTICLE IV
EXCHANGE OF SHARES
Section 4.01. Exchange Agent...................................................3
Section 4.02. Deposit of Certificates with Exchange Agent......................3
Section 4.03. Exchange Procedures..............................................4
Section 4.04. Rights of Former Admiralty Owners................................4
Section 4.05. No Further Ownership Rights in Admiralty Stock...................4
Section 4.06. No Fractional Shares.............................................4
Section 4.07. No Liability.....................................................4
Section 4.08. Lost Certificates................................................5
Section 4.09. Withholding Rights...............................................5
Section 4.10. Further Assurances...............................................5
Section 4.11. Dissenting Shares................................................5
ARTICLE V
SHAREHOLDER APPROVAL
Section 5.01. Shareholder Approval.............................................6
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF Admiralty
Section 6.01. Organization, Authority and Capacity.............................7
Section 6.02. Authorization and Validity.......................................7
Section 6.03. Absence of Conflicting Agreements or Required Consents...........7
Section 6.04. Governing Documents of Admiralty.................................7
Section 6.05. Outstanding and Authorized Capitalization........................8
Section 6.06. Financial Statements.............................................8
Section 6.07. Absence of Changes...............................................9
Section 6.08. No Undisclosed Liabilities......................................10
Section 6.09. Litigation, Etc.................................................10
Section 6.10. Real and Personal Property......................................10
Section 6.11. Insurance Policies..............................................10
Section 6.12. Taxes...........................................................10
Section 6.13. Required Vote of Admiralty Shareholders.........................10
Section 6.14. Brokerage.......................................................11
Section 6.15. Statements True and Correct.....................................11
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF RMC
Section 7.01. Organization, Authority and Capacity............................11
Section 7.02. Authorization and Validity......................................11
Section 7.03. Absence of Conflicting Agreements or Required Consents..........12
Section 7.04. Governing Documents.............................................12
Section 7.05. Outstanding and Authorized Capitalization.......................12
Section 7.06. Reports and Financial Statements................................12
Section 7.07. Absence of Changes..............................................13
Section 7.08. No Undisclosed Liabilities......................................13
Section 7.09. No Violation of Law.............................................13
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.01. Access to Information...........................................13
Section 8.02. No-Shop.........................................................14
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Section 8.03. Affirmative Covenants of Admiralty..............................14
Section 8.04. Negative Covenants of Admiralty.................................15
Section 8.05. Affirmative Covenants of RMC....................................16
Section 8.06. Negative Covenants of RMC.......................................16
Section 8.07. Confidentiality.................................................17
Section 8.08. Public Announcements............................................17
Section 8.09. Filings with State Offices......................................17
Section 8.10. Conditions to Closing...........................................17
Section 8.11. Sale of Shares; Shareholder Approval............................17
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF RMC
Section 9.01. Representations and Warranties..................................18
Section 9.02. Performance; Covenants..........................................18
Section 9.03. Necessary Consents and Approvals................................19
Section 9.04. No Material Adverse Change......................................19
Section 9.05. No Injunction, Etc..............................................19
Section 9.06. Admiralty Shareholder Approval..................................19
Section 9.07. Financial Statements............................................19
Section 9.08. Certificate of Share Exchange...................................20
Section 9.09. Tax-Free Share Exchange.........................................20
Section 9.10. Evidence of Compliance with Securities Laws.....................20
ARTICLE X
CONDITIONS TO OBLIGATIONS OF Admiralty
Section 10.01.Representations and Warranties..................................20
Section 10.02.Performance; Covenants..........................................20
Section ▇▇.▇▇.▇▇ Material Adverse Change......................................21
Section ▇▇.▇▇.▇▇ Injunction, Etc..............................................21
Section 10.05.Certificate of Share Exchange...................................21
Section 10.05.Tax-Free Share Exchange.........................................21
Section 10.06.Shareholder Approval............................................21
ARTICLE XI
TERMINATION
Section 11.01.Right of Termination............................................21
Section 11.02.Effect of Termination...........................................22
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ARTICLE XII
SURVIVAL OF TERMS; INDEMNIFICATION
Section 12.01.Survival........................................................22
Section 12.02.Indemnification by Admiralty....................................22
Section 12.03.Indemnification by RMC..........................................23
ARTICLE XII
CERTAIN DEFINITIONS...........................................................23
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.01. Notices.................................................25
Section 14.02. Expenses................................................25
Section 14.03. Further Assurances......................................25
Section 14.04. Waiver..................................................25
Section 14.05. Assignment..............................................25
Section 14.06. Binding Effect..........................................25
Section 14.07. Headings................................................26
Section 14.08. Entire Agreement........................................26
Section 14.09. Governing Law; Severability.............................26
Section 14.10. Counterparts............................................26
Section 14.11. Brokers and Finders.....................................26
Section 14.12. Schedules and Exhibits..................................26
Section 14.13. Enforcement of Agreement................................26
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PLAN AND AGREEMENT OF SHARE EXCHANGE
THIS PLAN AND AGREEMENT OF SHARE EXCHANGE ("Agreement") is made and entered
into as of March 2, 2001, by and between ADMIRALTY CORPORATION, a Georgia
corporation ("Admiralty"); RUBY MINING COMPANY, a Colorado corporation ("RMC");
and U.S. ENERGY CORP., a Wyoming corporation ("USE").
STATEMENT OF BACKGROUND
The Boards of Directors of each of Admiralty and RMC believe it is in their
best interests and in the best interests of their respective shareholders that
RMC acquire Admiralty through a share exchange pursuant to the specific terms
and provisions of this Agreement (the "Share Exchange") and, in furtherance
thereof, have approved the Share Exchange. The parties shall consummate the
Share Exchange in accordance with the provisions of the Georgia Business
Corporation Code (the "GBCC") and the Colorado Business Corporation Act
("CBCA").
Subject to the specific terms and conditions of this Agreement, the result
of the Share Exchange will be (among other things) that, from and after the
Effective Time (as defined below), (i) Admiralty will be a wholly-owned
subsidiary of RMC, and (ii) the current holders of the issued and outstanding
shares of common stock of Admiralty, except for those stockholders exercising
dissenter's rights in accordance with the GBCC, will become the holders of
certain newly-issued shares of common stock of RMC.
For Federal income tax purposes, it is intended that the Share Exchange
will qualify as a reorganization under the provisions of Section 368(a) of the
Code, and the parties to this Agreement intend to adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.
The parties desire to make certain representations and warranties and other
agreements in connection with the Share Exchange, as more specifically set forth
in this Agreement.
STATEMENT OF AGREEMENT
In consideration of the above and the mutual warranties, representations,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
ARTICLE I
TRANSACTIONS AND TERMS OF SHARE EXCHANGE
SECTION 1.01. SHARE EXCHANGE. The manner and basis of the Share Exchange
will be as follows:
(a) At the Effective Time (as defined below), all current stockholders
of Admiralty (the "Current Admiralty Shareholders") will have the right to
exchange their shares of common stock in Admiralty (the "Admiralty Common
Stock") for newly-issued shares
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of common stock, $0.001 par value, of RMC (the "Newly-Issued RMC Common
Stock"), in the manner provided herein. Notwithstanding the foregoing, any
Current Admiralty Shareholder not desiring to exchange shares will be
entitled to dissenters' rights as provided in the GBCC. Any Current
Admiralty Shareholder who does not exercise dissenters' rights as provided
in the GBCC will be deemed to have consented to the Share Exchange.
(b) At the Effective Time, RMC will, without any further action on its
part or on the part of the Admiralty Shareholders, automatically and by
operation of law acquire and become the owner for all purposes of all the
then issued and outstanding shares of Admiralty Common Stock and will be
entitled to have issued to it by Admiralty a certificate or certificates
representing the Admiralty Common Stock. Thereafter, (i) Admiralty will be
a wholly-owned subsidiary of RMC, and (ii) RMC will have full and exclusive
power to vote the Admiralty Common Stock, to receive dividends thereon and
to exercise all rights of an owner thereof.
(c) At the Effective Time, all previously issued and outstanding
certificates representing shares of Admiralty Common Stock (the "Admiralty
Certificates") will automatically and by operation of law cease to
represent shares of Admiralty Common Stock or any interest therein.
Thereafter, (i) no holder of an Admiralty Certificate will be entitled to
vote the shares of Admiralty Common Stock formerly represented by such
certificate, or to receive dividends thereon, or to exercise any other
rights of ownership in respect thereof, and (ii) each Current Admiralty
Shareholder will be obligated to surrender all Admiralty Certificates in
accordance with Article IV below.
(d) At the Effective Time (and subject to the Admiralty Shareholders'
obligation to surrender Admiralty Certificates), RMC will become obligated
to (i) issue to each Current Admiralty Shareholder who does not elect to
exercise dissenters' rights as provided in the GBCC, the number of shares
of Newly-Issued RMC Common Stock set forth in attached Exhibit A, and (ii)
deliver to each such Current Admiralty Shareholder one or more share
certificates representing such shares of Newly-Issued RMC Common Stock.
(e) At the Effective Time, Two Million Three Hundred Sixty Four
Thousand Twenty Seven (2,364,027) shares of the issued and outstanding
shares of common stock, $0.001 par value, of RMC (the "RMC Common Stock")
currently owned by USE will, without any further action on the part of RMC
or USE, be fully and completely cancelled and all previously issued and
outstanding certificates representing such shares will automatically and by
operation of law cease to represent shares of common stock of RMC. USE
shall surrender to the Exchange Agent (as defined below) for cancellation
all certificates representing the shares cancelled pursuant to the
immediately preceding sentence, together with a letter of transmittal, duly
executed, and such other documents as may reasonably be required by the
Exchange Agent. Following the Effective Time, USE will retain One Million
Three Hundred Thousand (1,300,000) shares of RMC Common Stock currently
owned by USE. On the Closing Date, RMC shall issue to USE, to be effective
as of the Effective Time, a two-year warrant to purchase an additional
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Five Hundred Thousand (500,000) shares of common stock of RMC for a
purchase price of Three Dollars ($3.00) per share.
SECTION 1.02. TIME AND PLACE OF CLOSING. The closing of the Share Exchange
(the "Closing") will take place at a specific time and location determined by
the mutual agreement of the parties which will be no later than March 31, 2001
(the "Closing Date").
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this Agreement,
the parties shall file a Certificate of Share Exchange executed in accordance
with the relevant provisions of the GBCC and shall make all other filings or
recordings required under the GBCC and the CBCA as soon as practicable on or
after the Closing Date. The Share Exchange and other transactions contemplated
by this Agreement will become effective on the date and at the time the
Certificate of Share Exchange reflecting the Share Exchange shall become
effective with the Secretary of State of the State of Georgia, or at such other
time and date as specified in the Certificate of Share Exchange (the "Effective
Time").
ARTICLE II
ADDITIONAL TERMS OF SHARE EXCHANGE
SECTION 2.01. OFFICERS AND DIRECTORS. At the Closing, the current directors
of RMC shall (i) appoint to serve as the directors of RMC the then-current
directors of Admiralty, and (ii) resign as directors of RMC, both of which
actions will be effective as of the Effective Time.
SECTION 2.02. FEES. On the Closing Date, Admiralty shall pay to USE for
services in connection with the negotiation of this Agreement the sum of Three
Hundred Twenty Five Thousand Dollars ($325,000) (the "Exchange Services Fee").
USE hereby acknowledges receipt from Admiralty of a non-refundable deposit in
the amount of Twenty Five Thousand Dollars ($25,000), which will be fully
credited towards payment of the Exchange Services Fee.
SECTION 2.03. TAX-FREE REORGANIZATION. For Federal income tax purposes, it
is intended that the Share Exchange will qualify as a reorganization under the
provisions of Section 368(a) of the Code. The parties to this Agreement hereby
adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
SECTION 2.04. LOCKED SHARES. For a period of one (1) year after the
Closing, USE shall not sell or otherwise dispose of 500,000 shares of the RMC
Common Stock retained by USE pursuant to this Agreement. After the one-year
anniversary of the Closing, Admiralty shall use its best efforts to insure that
any and all restrictive legends are removed, as soon as such removal is legal,
from all shares of RMC Common Stock retained by USE pursuant to this Agreement.
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ARTICLE III
ADDITIONAL PROVISIONS APPLICABLE TO CONVERSION OF SHARES
SECTION 3.01. SHARES HELD BY ADMIRALTY. Each share of Admiralty Common
Stock held in treasury by Admiralty shall be canceled and retired at the
Effective Time, and no consideration shall be issued in exchange therefor.
SECTION 3.02. FRACTIONAL SHARES. No certificates representing fractional
shares of Newly-Issued RMC Common Stock will be issued as a result of the Share
Exchange. Any fractional share interest to which a Shareholder that holds
outstanding shares of Admiralty Common Stock as of the Effective Time that such
Shareholder would otherwise be entitled to receive shall be rounded up to the
nearest whole share if such fraction is 0.5 or greater and shall be rounded down
to the nearest whole share if such fraction is less than 0.5.
SECTION 3.03. STOCK OPTIONS. At the Effective Time, all outstanding
Admiralty Options (as defined below) shall be assumed by RMC in accordance with
provisions described below. "Admiralty Options" means collectively any and all
outstanding warrants and outstanding options of any kind or nature whatsoever,
whether vested or unvested, to purchase shares of Admiralty Common Stock, and
any promissory notes or other debt instruments issued by Admiralty and
convertible into shares of Admiralty Common Stock.
(a) At the Effective Time, each Admiralty Option, whether vested or
unvested, shall be, in connection with the Share Exchange, assumed by RMC.
Each Admiralty Option so assumed by RMC under this Agreement shall continue
to have, and be subject to, the same terms and conditions set forth in the
Admiralty Option immediately prior to the Effective Time.
(b) Promptly following the Effective Time, RMC will issue to each
holder of an outstanding Admiralty Option a document evidencing the
foregoing assumption of such Admiralty Option by RMC. At or prior to the
Effective Time, RMC shall take all corporate action necessary to reserve
for issuance sufficient shares of Newly-Issued RMC Common Stock for
delivery upon exercise of Admiralty Options assumed by it in accordance
with this Section.
ARTICLE IV
EXCHANGE OF SHARES
SECTION 4.01. EXCHANGE AGENT. RMC's transfer agent shall serve as the
exchange agent (the "Exchange Agent") in the Share Exchange.
SECTION 4.02. DEPOSIT OF CERTIFICATES WITH EXCHANGE AGENT. At or prior to
the Effective Time, RMC shall give instructions to the Exchange Agent about the
issuance of certificates representing the aggregate number of shares of
Newly-Issued RMC Common Stock issuable pursuant to this Agreement.
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SECTION 4.03. EXCHANGE PROCEDURES. Upon surrender of an Admiralty
Certificate for cancellation to the Exchange Agent, together with a letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, then, subject to Closing, after the Effective
Time the holder of such certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of Newly-Issued
RMC Common Stock that such holder has the right to receive pursuant to the
provisions of this Agreement, and the Admiralty Certificate so surrendered shall
forthwith be cancelled. Until surrendered as contemplated by this Section, each
Admiralty Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the number of shares of
Newly-Issued RMC Common Stock set forth in this Agreement. No interest will be
paid or will accrue on any cash payable to holders of certificates pursuant to
the provisions of this Article.
Subject to Closing, after the Effective Time RMC shall not be obligated to
deliver the consideration to which any Admiralty Shareholder is entitled as a
result of the Share Exchange until such holder surrenders his or her certificate
or certificates representing the shares of Admiralty Common Stock for exchange
as provided in this Article or such holder provides an appropriate affidavit
regarding loss of such certificate or agreement and an indemnification in favor
of RMC as provided in this Article. All certificates representing shares of
Newly-Issued RMC Common Stock shall bear the appropriate "restricted stock
legend" evidencing that such shares have not been registered under the
Securities Act.
SECTION 4.04. RIGHTS OF FORMER ADMIRALTY OWNERS. At the Effective Time, the
stock transfer books of Admiralty shall be closed and no transfer of Admiralty
Common Stock by any such holder shall thereafter be made or recognized. Until
surrendered in accordance with the provisions of this Article, each certificate
theretofore representing shares of Admiralty Common Stock shall from and after
the Effective Time represent for all purposes only the right to receive the
number of shares of Newly-Issued RMC Common Stock provided in this Agreement.
SECTION 4.05. NO FURTHER OWNERSHIP RIGHTS IN ADMIRALTY STOCK. All shares of
Newly-Issued RMC Common Stock issued upon the surrender for exchange of shares
of Admiralty Common Stock in accordance with the terms hereof shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares of
Admiralty Common Stock, and there shall be no further registration of transfers
on the records of Admiralty of shares of Admiralty Capital Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to Admiralty for any reason, they shall be
canceled and exchanged as provided in this Article IV.
SECTION 4.06. NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Newly-Issued RMC Common Stock shall be issued upon the
surrender for exchange of certificates, no dividend or distribution of
Newly-Issued RMC Common Stock shall relate to such fractional share interests
and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a stockholder of RMC. The procedure with respect to
fractional shares is set forth in Section 3.04 hereof.
SECTION 4.07. NO LIABILITY. None of RMC, Admiralty, the Exchange Agent or
any party hereto shall be liable to any Person in respect of any shares of
Newly-Issued RMC Common
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Stock properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
SECTION 4.08. LOST CERTIFICATES. If any certificate representing Admiralty
Common Stock shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed and, if required by RMC, the posting by such Person of a
bond in such reasonable amount as RMC may direct as indemnity against any claim
that may be made against either of them with respect to such certificate, the
transfer agent will issue in exchange for such lost, stolen or destroyed
certificate the appropriate shares of Newly-Issued RMC Common Stock and any
unpaid dividends and distributions on such shares of Newly-Issued RMC Common
Stock deliverable in respect thereof, in each case pursuant to this Agreement.
SECTION 4.09. WITHHOLDING RIGHTS. RMC shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Newly-Issued RMC Common Stock such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code and the rules and regulations promulgated thereunder, or any provision
of state, local or foreign tax law. To the extent that amounts are so withheld
by RMC such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Admiralty Common Stock in
respect of which such deduction and withholding was made by RMC.
SECTION 4.10. DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary,
any shares of Admiralty Common Stock held by a holder who has demanded and
perfected dissenters' rights for such shares in accordance with Georgia law
and who, as of the Effective Time, has not effectively withdrawn or lost
such dissenters' rights ("Dissenting Shares") shall not be converted into
or represent a right to receive Newly-Issued RMC Common Stock pursuant to
this Agreement, but the holder thereof shall only be entitled to receive
payment in cash for the fair value of such holder's shares as determined
pursuant to the applicable provisions of Georgia law; provided, that no
such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of
Georgia law and surrendered to Admiralty the certificate or certificates
representing the Dissenting Shares. Admiralty shall be solely responsible
for paying any and all amounts owed with respect to any perfected
dissenters' rights.
(b) Notwithstanding the provisions of subsection (a), if any holder of
shares of Admiralty Capital Stock who demands appraisal of such shares
under Georgia law shall effectively withdraw or lose (through failure to
perfect or otherwise) the right to appraisal, then, as of the later of the
Effective Time and the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right to receive
Newly-Issued RMC Common Stock as provided herein, without interest thereon,
upon surrender of the certificate representing such shares.
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(c) Admiralty shall give RMC (i) prompt notice of any written notice
by any shareholder of intent to demand payment for such shareholder's
shares of Admiralty Capital Stock, withdrawals of such demands, and any
other instruments served pursuant to Georgia law and received by the
Admiralty, and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for dissenters' rights under Georgia
law. Admiralty shall not, except with the prior written consent of RMC,
voluntarily make any payment with respect to any demands for dissenters'
rights or offer to settle or settle any such demands.
ARTICLE V
SHAREHOLDER APPROVAL
SECTION 5.01. SHAREHOLDER APPROVAL. Admiralty shall (a) take all steps
required by the GBCC to obtain the consent of its shareholders as soon as
reasonably practicable, (b) recommend to its shareholders approval of the Share
Exchange (except to the extent that the Board of Directors of Admiralty
determines, after receiving the written advice of counsel, that such act is not
permitted by such Board of Directors in the discharge of the fiduciary duties to
Admiralty), (c) use its best efforts to obtain the necessary consent of its
shareholders, (d) take all action required under the GBCC with respect to the
holders of Dissenting Shares, and (e) in cooperation with RMC mail to its
shareholders a transmittal letter to be used by such shareholders in forwarding
their share certificates for surrender and exchange. All documentation sent by
Admiralty to its shareholders pursuant to the immediately preceding sentence
shall in form and substance be subject to the reasonable approval of RMC prior
to distribution by Admiralty.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ADMIRALTY
Admiralty represents and warrants the following to RMC, as of the date of
this Agreement and as of the Closing and the Effective Time:
SECTION 6.01. ORGANIZATION, AUTHORITY AND CAPACITY. Admiralty is a
corporation, duly organized, validly existing, and in good standing under the
laws of the State of Georgia, and has the full corporate power and authority
necessary to (i) execute, deliver and perform its obligations under this
Agreement and the other documents and instruments to be delivered by Admiralty
pursuant to this Agreement (collectively, the "Share Exchange Documents") and
(ii) carry on its business as it has been and is now being conducted and to own
and lease the properties and assets which it now owns or leases. Admiralty is
duly qualified to do business and is in good standing in every jurisdiction in
which the failure to be so qualified or in good standing could be expected to
have a material adverse effect on (A) Admiralty's ability to perform its
obligations under the Share Exchange Documents to be executed and delivered by
it or (B) the assets, results of operations or prospects of Admiralty taken as a
whole (a "Admiralty Material Adverse Effect").
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SECTION 6.02. AUTHORIZATION AND VALIDITY. The execution, delivery and
performance of the Share Exchange Documents have been duly authorized by all
necessary corporate action on the part of Admiralty, other than shareholder
approval. The Share Exchange Documents to be executed and delivered by Admiralty
have been or will be, as the case may be, duly executed and delivered by
Admiralty and constitute or will constitute the legal, valid and binding
obligations of Admiralty, enforceable in accordance with their respective terms.
SECTION 6.03. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. The
execution, delivery and performance by Admiralty of the Share Exchange Documents
to be executed and delivered by Admiralty: (a) do not require the consent of or
notice to any Authority or any other third party; (b) do not conflict with any
provision of Admiralty's articles or certificate of incorporation or bylaws; (c)
do not conflict with or result in a violation of any law, ordinance, regulation,
ruling, judgment, order or injunction of any court or governmental
instrumentality to which Admiralty is subject or by which Admiralty or any of
its respective properties are bound; (d) do not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, instrument, license or
permit to which Admiralty is a party or by which Admiralty or any of its
properties are bound; and (e) will not create any lien, encumbrance or
restriction upon any of the assets or properties of Admiralty.
SECTION 6.04. GOVERNING DOCUMENTS OF ADMIRALTY. True and correct copies of
the organizational documents and all amendments thereto of Admiralty have been
provided to RMC. RMC has previously been provided with access to the minutes of
Admiralty.
SECTION 6.05. OUTSTANDING AND AUTHORIZED CAPITALIZATION. Admiralty
currently has authorized 50,000,000 shares of Admiralty Common Stock, of which
17,595,212 shares are currently issued and outstanding. As of the Effective
Time, Admiralty will have issued and outstanding not more than 18,370,000 shares
of Admiralty Common Stock, reflecting additional shares sold in Admiralty's
private placement. Admiralty currently has issued and outstanding Admiralty
Options to acquire 1,587,766 shares of Admiralty Common Stock. Admiralty
currently has authorized 1,000,000 shares of Preferred Stock, none of which has
been issued. Admiralty is not obligated to issue or repurchase any Admiralty
Common Stock for any reason and no person or entity has any right or privilege
(whether preemptive or contractual) for the purchase, subscription or issuance
of any unissued Admiralty Common Stock.
SECTION 6.06. FINANCIAL STATEMENTS. Admiralty has provided to RMC the
unaudited financial statements of Admiralty for the year ended December 31, 2000
(collectively, the "Admiralty Financial Statements"). The Admiralty Financial
Statements have been prepared by Admiralty's management in accordance with
generally accepted accounting principles consistently applied and except for (a)
the omission of notes to the Admiralty Financial Statements, and (b) the fact
that the Admiralty Financial Statements will be subject to normal and customary
audit adjustments which will not, in the aggregate, be material. The Admiralty
Financial Statements present fairly the financial position of Admiralty as of
the dates indicated and present fairly the results of operations of Admiralty
for the periods then ended, and are in
8
accordance with the books and records of Admiralty, which are complete and
correct in all material respects.
SECTION 6.07. ABSENCE OF CHANGES. Since December 31, 2000, Admiralty has
conducted its business only in the ordinary course and has not:
(a) suffered any material adverse change in its working capital,
condition (financial or otherwise), assets, liabilities, reserves, business
or operations;
(b) paid, discharged or satisfied any material liability other than in
the ordinary course of business;
(c) written off as uncollectible any account receivable other than in
the ordinary course of business or suffered an impairment of any other
asset (or is aware of any facts that would result in such write-off or
impairment);
(d) compromised any debts, claims or rights or disposed of any of its
properties or assets other than in the ordinary course of business;
(e) entered into any commitments or transactions not in the ordinary
course of business involving aggregate value in excess of $25,000 or made
aggregate capital expenditures or commitments in excess of $25,000;
(f) made any material change in any method of accounting or accounting
practice;
(g) subjected any of its assets, tangible or intangible, to any Lien,
encumbrance or restriction of any nature whatsoever, except for liens for
current property taxes not yet due and payable;
(h) hired, committed to hire or terminated any employee other than in
the ordinary course of business;
(i) except for payments, dividends or distributions consistent with
past practices for prior periods, declared, set aside or made any payment,
dividend or other distribution to any holder of Admiralty Common Stock or
purchased, redeemed or otherwise acquired, directly or indirectly, any
Admiralty Common Stock;
(j) terminated or amended any material contract, license or other
instrument to which Admiralty is a party or suffered any loss or
termination or threatened loss or termination of any existing business
arrangement or material supplier, the termination or loss of which, in the
aggregate, would have a Admiralty Material Adverse Effect;
(k) effected any change in its capital structure;
(l) paid, discharged or satisfied any liability, obligation, or Lien
other than payment, discharge or satisfaction of (i) Indebtedness as it
matures and become due and
9
payable or (ii) liabilities, obligations or Liens in the ordinary course of
business consistent with past practice;
(m) changed any of the accounting or tax principles, practices or
methods used by Admiralty, except as required by changes in applicable Tax
Laws or changed reserve amounts or policies;
(n) settled or compromised any Tax liability or agreed to any
adjustment of any Tax attribute or made any election with respect to Taxes;
(o) (i) made any change in its working capital practices generally,
including accelerating any collections of cash or accounts receivable or
deferring payments or (ii) failed to make timely accruals, including with
respect to accounts payable and liabilities incurred in the ordinary course
of business;
(p) failed to renew (at levels consistent with presently existing
levels), terminated or amended or failed to perform any of its obligations
or permitted any material default to exist or caused any material breach
under, or entered into (except for renewals in the ordinary course of
business consistent with past practice), any policy of insurance; or
(q) except in the ordinary course of business consistent with past
practice pursuant to appropriate confidentiality agreements, and except as
required by any Law or any existing agreements or as may be reasonably
necessary to secure or protect intellectual or other property rights of
Admiralty, provided any confidential information to any Person other than
RMC.
SECTION 6.08. NO UNDISCLOSED LIABILITIES. Admiralty does not have any
material Liabilities, other than those Liabilities which have been adequately
reflected in or provided for in the Admiralty Financial Statements or incurred
in the ordinary course of its business since the date of the most recent balance
sheet included in the Admiralty Financial Statements.
SECTION 6.09. LITIGATION, ETC. There are (a) no claims, lawsuits, actions,
arbitrations, administrative or other proceedings pending (a "Claim") against
Admiralty, (b) to the knowledge of Admiralty, no governmental or administrative
investigations or inquiries pending that involve Admiralty, and (c) no judgments
against or consent decrees binding on Admiralty or its assets or which may have
an adverse effect on, the business or goodwill of Admiralty.
SECTION 6.10. REAL AND PERSONAL PROPERTY.
(a) Admiralty (i) has good and valid title to all of the personal and
mixed, tangible and intangible property, rights and assets which it
purports to own, including all the personal property and assets reflected
in the Admiralty Financial Statements; and (ii) owns such rights, assets
and personal property free and clear of all Liens, encumbrances or
restrictions of any nature whatsoever (except for those disclosed in the
Admiralty Financial Statements and except for current year ad valorem
taxes).
10
(b) Admiralty does not own any real property.
SECTION 6.11. INSURANCE POLICIES. Each of Admiralty's insurance policies is
in full force and effect, is valid and enforceable, and Admiralty is not in
breach of or in default under any such policy. All of Admiralty's current
policies will be outstanding and duly in force at the Closing Date, the premiums
payable in respect of such policies have been paid in full, and none of such
policies provide for any retrospective premium adjustment or other experience
based liability on the part of Admiralty. Admiralty has not received any notice
of or any reason to believe that there is or has been any actual, threatened, or
contemplated termination or cancellation of any insurance policy relating to the
said insurance.
SECTION 6.12. TAXES. Admiralty has filed or obtained filing extensions for
all tax returns, federal, state, county, and local, required to be filed by it,
and Admiralty has paid or established adequate reserves (in accordance with
generally accepted accounting principles) for the payment of all taxes shown to
be due by such returns as well as all other taxes, assessments, and governmental
charges which have become due or payable, including, without limitation, all
taxes which Admiralty is obligated to withhold from amounts owing to employees,
creditors, and third parties. The federal income tax returns of Admiralty have
never been audited by the Internal Revenue Service and no state income or sales
tax returns of Admiralty have been audited. No deficiency assessment with
respect to or proposed adjustment of Admiralty's federal, state, county, or
local taxes is pending or, to the best of Admiralty's knowledge, threatened.
There is no tax lien, whether imposed by any federal, state, county, or local
taxing authority, outstanding against the assets, properties, or business of
Admiralty. Neither Admiralty nor any of its shareholders have ever filed a
consent pertaining to Admiralty pursuant to Section 341(f) of the IRC (as
hereinafter defined), relating to collapsible corporations.
SECTION 6.13. REQUIRED VOTE OF ADMIRALTY SHAREHOLDERS. The affirmative vote
of the holders of a majority of the outstanding shares of Admiralty Common Stock
is required to approve the Share Exchange. No other vote of the Shareholders of
Admiralty is required by law, the certificate of incorporation or bylaws of
Admiralty or otherwise in order for Admiralty to consummate the Share Exchange
and the transactions contemplated hereby.
SECTION 6.14. BROKERAGE. Ladan Reserve, Inc., has served as a finder in
connection with the Share Exchange. At the Closing, Admiralty shall pay to Ladan
Reserve, Inc., as a finder's fee the sum of Fifty Thousand Dollars ($50,000).
Except as specifically provided otherwise in this Section, neither Admiralty,
nor any Admiralty Shareholder, has employed any broker, finder, advisor,
consultant or other intermediary in connection with this Agreement or the
transactions contemplated by this Agreement who is or might be entitled to any
fee, commission or other compensation from Admiralty, or from RMC or its
Affiliates, upon or as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby.
SECTION 6.15. STATEMENTS TRUE AND CORRECT. No representation or warranty
made herein by Admiralty, nor in any statement, certificate or instrument to be
furnished to RMC by Admiralty pursuant to any Share Exchange Document, contains
or will contain any untrue statement of material fact or omits or will omit to
state a material fact necessary to make these statements contained herein and
therein not misleading. There is no fact known to Admiralty
11
which materially and adversely affects the business, prospects, working capital
or financial condition of Admiralty or its properties or assets, which has not
been set forth in this Agreement.
SECTION 6.16. COMPETING TECHNOLOGY. Admiralty has no actual knowledge of
any technology, other than that being used and/or developed by Admiralty, which
has the ability to differentiate among the various types of ferrous and
non-ferrous metals through seawater.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF RMC
RMC and USE hereby represent and warrant to Admiralty as follows as of the
date of this Agreement and as of the Closing and the Effective Time:
SECTION 7.01. ORGANIZATION, AUTHORITY AND CAPACITY. RMC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado. RMC has the full power and authority necessary to (a)
execute, deliver and perform its obligations under the Share Exchange Documents
to be executed and delivered by it, and (b) carry on its business as it has been
and is now being conducted and to own and lease the properties and assets which
it now owns or leases. RMC is duly qualified to do business and is in good
standing in each jurisdiction in which a failure to be so qualified or in good
standing would have a material adverse effect on (i) their ability to perform
their obligations under the Share Exchange Documents to be executed and
delivered by it or, (ii) the assets, results of operations or prospects of RMC
(an "RMC Material Adverse Effect").
SECTION 7.02. AUTHORIZATION AND VALIDITY. The execution, delivery and
performance of the Share Exchange Documents to be executed and delivered by RMC
will be duly authorized by all necessary corporate action by RMC. The Share
Exchange Documents to be executed and delivered by RMC have been or will be, as
the case may be, duly executed and delivered by RMC and constitute or will
constitute the legal, valid and binding obligations of RMC, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, or other laws affecting creditors' rights generally, or as may be
modified by a court of equity.
SECTION 7.03. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. The
execution, delivery and performance by RMC of the Share Exchange Documents to be
executed and delivered by it: (a) do not require the consent of or notice to any
governmental or regulatory authority or any other third party; (b) will not
conflict with any provision of RMC's articles or certificate of incorporation or
bylaws; (c) will not conflict with or result in a violation of any law,
ordinance, regulation, ruling, judgment, order or injunction of any court or
governmental instrumentality to which RMC is a party or by which RMC or any of
their respective properties are bound; (d) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any RMC Material Agreement; and (e) will
not create any lien, encumbrance or restriction upon any of the assets or
properties of RMC.
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SECTION 7.04. GOVERNING DOCUMENTS. True and correct copies of the
organizational documents and all amendments thereto of RMC and copies of the
bylaws of RMC have been provided to Admiralty. Admiralty has previously been
provided with access to RMC's minutes, and such minutes accurately reflect all
proceedings of the shareholders and board of directors of RMC (and all
committees thereof).
SECTION 7.05. OUTSTANDING AND AUTHORIZED CAPITALIZATION. The authorized
capital stock of RMC consists of One Hundred Million (100,000,000) shares of RMC
Common Stock. As of the date of this Agreement, RMC has 3,994,027 shares of RMC
Common Stock and no shares of preferred stock issued and outstanding. There are
no outstanding warrants, options, rights, calls or other commitments of any
nature relating to shares of capital stock of RMC, no outstanding securities
convertible into or exchangeable for shares of capital stock of RMC, and, RMC is
not obligated to issue or repurchase any of its shares of capital stock for any
reason and no person or entity has any right or privilege (whether preemptive or
contractual) for the purchase, subscription or issuance of any unissued shares
of capital stock of RMC. No shares of RMC Common Stock are held in RMC's
treasury. All Newly-Issued RMC Common Stock to be issued in connection with the
Share Exchange will be duly and validly issued, fully paid and nonassessable.
SECTION 7.06. REPORTS AND FINANCIAL STATEMENTS. RMC Common Stock is
registered with the Securities and Exchange Commission (the "SEC") under Section
12(g) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith RMC files reports and other information with
the SEC. All reports and other information required to be filed by RMC
(individually a "SEC Report" and collectively, the "SEC Reports") have
previously been made available to Admiralty (including through the SEC's ▇▇▇▇▇
system). As of their respective dates (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing), such SEC
Reports (i) complied as to form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations promulgated thereunder and (ii) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements included in the SEC Reports (including any related notes and
schedules) complied as to form, as of their respective dates of filing with the
SEC, in all material respects with all applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto, and except that
unaudited statements do not contain footnotes in substance or form required by
GAAP, as is permitted by the SEC's Form 10-QSB) and fairly presented the
financial position of RMC as of the dates thereof and the results of operations
and cash flows for the periods or as of the dates then ended (subject, where
appropriate, to normal year-end adjustments).
SECTION 7.07. ABSENCE OF CHANGES. Except as set forth in the SEC Reports,
and except as specifically contemplated by this Agreement, since November 30,
2000, RMC has conducted its business only in the ordinary course and there has
not been an RMC Material Adverse Effect.
13
SECTION 7.08. NO UNDISCLOSED LIABILITIES. RMC has no Liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
except (a) Liabilities or obligations reflected in any of the SEC Reports, (b)
Liabilities incurred in the ordinary course of business since the date of the
most recent SEC Reports, or (c) Liabilities or obligations that would not,
individually or in the aggregate, have an RMC Material Adverse Effect.
SECTION 7.09. NO VIOLATION OF LAW. The business of RMC has not been and is
not currently in violation of no local, state or federal law, ordinance,
regulation, order, injunction or decree, or any other requirement of any
governmental body except (a) as described in any of the SEC Reports and (b) for
violations that would not, individually or in the aggregate, have an RMC
Material Adverse Effect.
ARTICLE VIII
ADDITIONAL AGREEMENTS
SECTION 8.01. ACCESS TO INFORMATION. At all times prior to the Closing,
Admiralty will afford the officers and authorized representatives of RMC access
to Admiralty's properties, books and records that may relate to or concern the
Share Exchange and will furnish such parties with such additional financial,
operating and other information as to the business and properties of Admiralty
as such parties may from time to time reasonably request. Such parties shall
also be allowed access, upon reasonable notice, to consult with the officers,
employees, accountants, counsel and agents of Admiralty in connection with such
investigation of the properties and business of Admiralty. In addition, at all
times prior to the Closing RMC will afford the officers and authorized
representatives of Admiralty access to all of RMC's properties, books and
records that may relate to or concern the Share Exchange and will furnish such
parties with such additional financial, operating and other information as to
the business and properties of RMC as such parties may from time to time
reasonably request. Such parties shall also be allowed access, upon reasonable
notice, to consult with the officers, employees, accountants, counsel and agents
of RMC in connection with such investigation of the properties and business of
RMC. In each case, such access or investigation shall be subject to Section
8.07.
SECTION 8.02. NO-SHOP. Unless and until this Agreement is terminated
pursuant to Article XI hereof, Admiralty shall not directly or indirectly,
through any officer, director, shareholder, employee, agent, or otherwise: (a)
solicit, initiate or encourage submission of proposals or offers from any person
or other entity relating to any purchase of any acquisition or business
combination of all or a material amount of the assets of, or an equity interest
in Admiralty, or approve or undertake any such transaction; (b) participate in
any discussions or negotiations regarding, or furnish to any other person,
corporation or other entity, any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person, corporation or other entity to do,
any of the foregoing; or (c) enter into any contract, agreement or
understanding, whether oral or written, that would prevent the consummation of
the Share Exchange. Notwithstanding the foregoing, in the event Admiralty or any
Shareholder shall directly or indirectly receive a proposal relating to any
acquisition or business combination involving Admiralty, Admiralty or such
Shareholder shall immediately notify RMC in writing of the terms of such
proposal.
14
Admiralty agrees that it will, and will cause its officers, directors and
representatives to, immediately cease and cause to be terminated any activities,
discussions or negotiations existing as of the date of this Agreement with any
parties conducted heretofore with respect to any acquisition, business
combination, equity interest or similar transaction with respect to Admiralty.
SECTION 8.03. AFFIRMATIVE COVENANTS OF ADMIRALTY. From the date hereof
until the earlier of the Effective Time or the termination of this Agreement,
Admiralty covenants and agrees that, unless the prior written consent of RMC
shall have been obtained, and except as otherwise expressly contemplated herein,
Admiralty shall:
(a) operate its business only in the usual, regular, and ordinary
course of business, consistent with past practices;
(b) use reasonable commercial efforts to preserve intact its business
organization, licenses, permits, government programs, private programs and
customers;
(c) use reasonable commercial efforts to retain the services of its
employees, agents and consultants on terms and conditions not less
favorable than those existing prior to the date hereof and to ensure that
there are no material or adverse changes to employee relations;
(d) keep and maintain its assets in their present condition, repair
and working order, except for normal depreciation and wear and tear, and
maintain its insurance, rights and licenses;
(e) pay all accounts payable of Admiralty in accordance with past
practice and collect all accounts receivable in accordance with past
practice;
(f) cause all tax returns that have not been filed prior to the date
hereof to be prepared and filed on or before the date such tax return is
required to be filed (taking into account any extensions of the filing
deadlines granted); provided, however, that any such tax return shall not
be filed without a reasonable opportunity for prior review and comment by
RMC;
(g) perform in all material respects all obligations under agreements
relating to or affecting its assets, properties or rights;
(h) keep in full force and effect present insurance policies or other
comparable insurance coverage; and
(i) notify RMC of (i) any event or circumstance which has caused or
constituted, or is reasonably likely to have a Admiralty Material Adverse
Effect or would cause or constitute, a breach of any of the
representations, warranties or covenants contained herein by Admiralty; or
(ii) any material change in the normal course of business or in the
operation of the assets, and of any governmental complaints, investigations
or hearings (or communications indicating that the same may be
15
contemplated), adjudicatory proceedings, budget meetings or submissions
involving Admiralty or any material property of Admiralty. Admiralty agrees
to keep RMC fully informed of such events and to permit RMC's
representatives prompt access to all materials prepared in connection
therewith.
SECTION 8.04. NEGATIVE COVENANTS OF ADMIRALTY. From the date hereof until
the earlier of the Effective Time or the termination of this Agreement,
Admiralty covenants and agrees that it will not do any of the following without
the prior written consent of RMC:
(a) take any action which would (i) adversely affect the ability of
any party to the Share Exchange Documents to obtain any consents required
for the transactions contemplated thereby, or (ii) adversely affect the
ability of any party hereto to perform its covenants and agreements under
the Share Exchange Documents;
(b) amend any of its organizational or governing documents;
(c) repurchase, redeem, or otherwise acquire or exchange, directly or
indirectly, any Admiralty Common Stock, or declare or pay any dividend or
make any other distribution in respect of Admiralty Common Stock;
(d) purchase or acquire any assets or properties, whether real or
personal, tangible or intangible, or sell or dispose of any assets or
properties, whether real or personal, tangible or intangible, except in the
ordinary course of business and consistent with past practices;
(e) purchase any securities or make any material investment, either by
purchase of stock or other securities, contributions to capital, asset
transfers, or purchase of any assets, in any entity, or otherwise acquire
direct or indirect control over any other entity;
(f) adopt any new employee benefit plan or employment or consulting
agreement or make any material change in or to any existing employee
benefit plan or employment or consulting agreement other than any such
change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan;
(g) make any significant change in any tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in tax laws or regulatory accounting requirements or
GAAP;
(h) commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of Admiralty for
material money damages or restrictions upon the operations of Admiralty;
(i) except in the ordinary course of business, make or commit to make
any capital expenditure, or enter into any lease of capital equipment as
lessee or lessor;
16
(j) take any action, or omit to take any action, which would cause any
of the representations and warranties contained in Article VI to be untrue
or incorrect; and
(k) agree, in writing or otherwise, to take any of the foregoing
actions or take any action that would result in any of the conditions to
the Share Exchange not being satisfied or, except as otherwise allowed
hereunder, that could reasonably be expected to prevent, impede, interfere
with or significantly delay the transactions contemplated hereby.
SECTION 8.05. AFFIRMATIVE COVENANTS OF RMC. From the date hereof until the
earlier of the Effective Time or the termination of this Agreement, RMC and USE
covenant and agree that, unless the prior written consent of Admiralty shall
have been obtained, and except as otherwise expressly contemplated herein, RMC
shall, and USE shall cause RMC, to:
(a) use reasonable commercial efforts to preserve intact its business
organization, licenses, permits, government programs, private programs and
customers; and
(b) notify Admiralty of (i) any event or circumstance which has caused
or constituted, or is reasonably likely to have an RMC Material Adverse
Effect or would cause or constitute, a breach of any of RMC's
representations, warranties or covenants contained herein; or (ii) any
material change in the normal course of business or in the operation of
RMC's assets, and of any material governmental complaints, investigations
or hearings (or communications indicating that the same may be
contemplated) or adjudicatory proceedings; and
(c) Conduct its business only in the ordinary course, and not engage
in any extraordinary transactions without Admiralty's prior written
consent.
SECTION 8.06. NEGATIVE COVENANTS OF RMC. From the date hereof until the
earlier of the Effective Time or the termination of this Agreement, RMC and USE
covenant and agree that, unless the prior written consent of Admiralty shall
have been obtained, and except as otherwise expressly contemplated herein, RMC
shall, and USE shall cause RMC, to:
(a) not take any action which would (i) adversely affect the ability
of any party to the Share Exchange Documents to obtain any consents
required for the transactions contemplated thereby, or (ii) adversely
affect the ability of any party hereto to perform its covenants and
agreements under the Share Exchange Documents;
(b) not take any action, or omit to take any action, which would cause
any of the representations and warranties contained in Article VII to be
untrue or incorrect.
(c) Not dispose of any of its assets, except in the ordinary course of
business, except that RMC may assign its mining equipment and investments
in USE and Crested Corp. to USE as part of the Exchange Services Payment.
17
(d) Not increase the salary, compensation formula or other
compensation arrangements for any employee, and not grant any unusual or
extraordinary bonuses, benefits or other forms of direct or indirect
compensation to any employee, officer, director, shareholder or consultant.
(e) Not increase, terminate, amend or otherwise modify any plan for
the benefit of employees.
(f) Not issue any equity securities or Rights without the prior
written consent of Admiralty.
(g) Except for amounts described in attached Schedule 8.06(g) and
except for payment in cash of dividends, redemption amounts or shareholder
distributions, and payment of current liabilities as shown in the Form
10-QSB for the six (6) months ended November 30, 2000, not pay any
dividends, redeem any securities, or otherwise cause assets of RMC to be
distributed to any of its shareholders except by way of compensation to
employees who are also shareholders within the limitations set forth above,
without the prior written consent of Admiralty.
(h) Not borrow any funds, under existing lines of credit or otherwise,
except as reasonably necessary for the ordinary operation of its business
in a manner, and in amounts, in keeping with historical practices.
(i) Not to enter into any material contract or agreement relating to
the underwriting of securities without the written consent of Admiralty.
SECTION 8.07. CONFIDENTIALITY. RMC and Admiralty agree that each shall hold
in confidence any confidential information about the other that it has received,
or hereafter receives, pursuant to any provision of this Agreement under
circumstances indicating the confidentiality of such information unless (a) such
information shall have been publicly disclosed other than as a result of any
wrongful action by the recipient of such information, or (b) the recipient of
such information independently develops or is aware of such information.
SECTION 8.08. PUBLIC ANNOUNCEMENTS. RMC and Admiralty will consult with
each other before issuing any press releases or otherwise making any public
statements or filings with governmental entities with respect to this Agreement
or the transactions contemplated hereby and shall not issue any press releases
or make any public statements or filings with governmental entities prior to
such consultation and shall modify any portion thereof if the other party
objects thereto, unless the same may be required by applicable law.
SECTION 8.09. FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Admiralty shall execute and file a Certificate of
Share Exchange with the Secretary of State of the State of Georgia and, if
required, the Secretary of State of the State of Colorado in connection with the
Closing.
18
SECTION 8.10. CONDITIONS TO CLOSING. Admiralty and RMC agree to use their
commercially reasonable best efforts to satisfy the closing conditions set forth
in Articles IX and X of this Agreement by March 31, 2001, and if not by such
time, as soon thereafter as possible.
SECTION 8.11. SALE OF SHARES; SHAREHOLDER APPROVAL.
(a) The Newly-Issued RMC Common Stock to be issued in the Share
Exchange will be issued by RMC relying on an exemption from registration
pursuant to Section 4(2) under the Securities Act and Regulation D
thereunder or similar exemptions under the Securities Act, and the
certificates representing the shares of Newly-Issued RMC Common Stock shall
bear appropriate legends to identify such shares as "restricted securities"
under the Securities Act and to comply with applicable state securities
laws. Each Admiralty Shareholder acknowledges and agrees that in order for
RMC to rely on such exemptions from registration, RMC will be required to
obtain certain representations made by the Shareholders including, but not
limited to, representations concerning status as an "accredited investor"
within the meaning of Regulation D of the Securities Act and regarding
limitations on resales of the Newly-Issued RMC Common Stock.
(b) So long as required in the reasonable opinion of RMC's counsel,
stock transfer orders will be given to RMC's Transfer Agent in connection
with the certificates to be issued representing the Newly-Issued RMC Common
Stock and such certificates will bear legends substantially as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF, NOR WILL ANY
ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER HEREOF BY
THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH
SHARES SHALL THEN BE IN EFFECT OR UNLESS THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION WITH RESPECT TO ANY PROPOSED TRANSFER
OR DISPOSITION OF SUCH SHARES SHALL HAVE BEEN ESTABLISHED TO THE
SATISFACTION OF THE ISSUER. IN ADDITION, THESE SECURITIES HAVE
NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER THE APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION OR QUALIFICATION UNDER SUCH
LAWS."
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ARTICLE IX
CONDITIONS TO OBLIGATIONS OF RMC
The obligation of RMC to consummate the Share Exchange is subject to the
satisfaction or written waiver, at or prior to Closing, of each of the following
conditions:
SECTION 9.01. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Admiralty set forth in this Agreement, or any document or
instrument delivered to RMC hereunder, shall be true and correct in all material
respects as of the Effective Time with the same force and effect as if such
representations and warranties had been made at and as of the Effective Time,
except with respect to any of such representations and warranties referring to a
state of facts existing on a specified date prior to the Closing Date, it shall
be sufficient if at the Effective Time such representation and warranty
continues to describe accurately the state of facts existing on the date so
specified; provided, however, that Admiralty shall have five days to cure any
such material breach of a representation or warranty (it being agreed that such
five day period shall commence as to such breach upon RMC becoming aware thereof
and that disclosure of a matter subsequent to the date hereof shall not
constitute a cure).
SECTION 9.02. PERFORMANCE; COVENANTS. All of the terms, covenants and
conditions of the Share Exchange Documents to be complied with or performed by
Admiralty at or prior to Closing shall have been complied with and performed in
all material respects including, but not limited to, the delivery of the
following documents:
(a) A good standing certificate regarding Admiralty, certified by the
Secretary of State of the respective state of incorporation and all states
where such entity is qualified to do business, dated within 30 business
days of the Closing;
(b) A certificate dated as of the Closing Date signed by the duly
authorized officers of Admiralty certifying that the representations and
warranties of Admiralty set forth herein are true and correct in all
material respects as of the Effective Time and that Admiralty has fulfilled
all of the conditions of this Article IX;
(c) Written consents of all third parties necessary for the
consummation of the transactions contemplated by the Share Exchange
Documents;
(d) Resolutions duly adopted by Admiralty (Board and shareholder)
approving the execution, delivery and performance of this Agreement and the
consummation of the Share Exchange, certified by an appropriate officer of
Admiralty; and
(e) All books and records of Admiralty, including all corporate and
other records, minute books, stock record books, stock registers, books of
accounts, contracts, agreements and such other documents or certificates as
shall be reasonably requested by RMC, which the parties acknowledge will at
the Closing be located at the corporate offices of Admiralty.
20
(f) An opinion of counsel to Admiralty substantially similar in form
and content to the document attached to this Agreement as Exhibit B.
SECTION 9.03. NECESSARY CONSENTS AND APPROVALS. RMC and Admiralty shall
have obtained all licenses, consents and permits, provided all notices, and all
waiting periods required by Law, shall have expired, necessary in order for RMC
and Admiralty to consummate the Share Exchange.
SECTION 9.04. NO MATERIAL ADVERSE CHANGE. There shall not have occurred a
Admiralty Material Adverse Effect between the date hereof and the Effective Time
or a material change in the financial condition of Admiralty as represented in
the Admiralty Financial Statements.
SECTION 9.05. NO INJUNCTION, ETC. No action, proceeding, investigation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
Agreement or the consummation of the Share Exchange, or which is related to or
arises out of the business or operations of Admiralty, if such action,
proceeding, investigation or legislation, in the reasonable judgment of RMC or
its counsel, would make it inadvisable to consummate such transactions. In the
event any order, decree or injunction shall have been issued, each party shall
use its reasonable efforts to remove any such order, decree or injunction.
SECTION 9.06. ADMIRALTY SHAREHOLDER APPROVAL. This Agreement and all other
documents and instruments to be delivered in connection herewith, shall have
been approved by the Admiralty Shareholders in accordance with the GBCC.
SECTION 9.07. FINANCIAL STATEMENTS. RMC shall obtain all audited historical
or unaudited pro forma financial statements with respect to the transaction
contemplated under this Agreement that will be required to be included in a
Current Report on Form 8-K/A to be filed with respect to the Share Exchange.
Admiralty understands that RMC shall not close the Share Exchange unless and
until the audit report on Admiralty's financial statements for the two years
ended December 31, 2000, has been issued and delivered to RMC. Admiralty's
audited financial statements shall cover the two years ended December 31, 2000,
and from inception to that date.
SECTION 9.08. CERTIFICATE OF SHARE EXCHANGE. Admiralty shall have executed
and delivered to RMC the certificate of Share Exchange to be filed with the
Secretary of State of the State of Georgia and/or the Secretary of State of the
State of Colorado in connection with the Share Exchange.
SECTION 9.09. TAX-FREE SHARE EXCHANGE. No event outside the control of RMC
shall have occurred between the date of this Agreement and the Closing Date, so
as to jeopardize the treatment of the transactions contemplated by the Share
Exchange as a reorganization within the meaning of Section 368(a) of the Code.
21
SECTION 9.10. EVIDENCE OF COMPLIANCE WITH SECURITIES LAWS. RMC shall be
satisfied that the issuance of the Newly-Issued RMC Common Stock to the
Shareholders qualifies for an exemption from registration pursuant to Section
4(2) under the Securities Act and Regulation D thereunder.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF ADMIRALTY
The obligations of Admiralty to close the Share Exchange are subject to the
satisfaction or waiver, at or prior to Closing, of each of the following
conditions:
SECTION 10.01. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of RMC set forth in this Agreement, or any document or instrument
delivered to any party hereunder, shall be true and correct in all material
respects as of the Effective Time with the same force and effect as if such
representations and warranties had been made at and as of the Effective Time,
except with respect to any of such representations and warranties referring to a
state of facts existing at a specified date prior to the Closing Date, it shall
be sufficient if at the Effective Time such representation and warranty
continues to describe accurately in all material respects the state of facts
existing on the date so specified; provided, however, that RMC shall have five
days to cure any such material breach of a representation or warranty (it being
agreed that such five day period shall commence as to such breach upon Admiralty
becoming aware thereof and that disclosure of a matter subsequent to the date
hereof shall not constitute a cure).
SECTION 10.02. PERFORMANCE; COVENANTS. All of the terms, covenants and
conditions of this Agreement to be complied with or performed by RMC at or prior
to the Closing shall have been complied with and performed in all material
respects, including, but not limited to delivery of the following documents:
(a) A good standing certificate regarding RMC certified by the
Secretary of State of Colorado dated within 30 days prior to Closing;
(b) A certificate dated as of the Closing Date signed by a duly
authorized officer of RMC certifying that the representations and
warranties of RMC set forth herein are true and correct in all material
respects as of the Effective Time and that RMC has fulfilled all of the
conditions of this Article; and
(c) Resolutions duly adopted by the Board of Directors of RMC
approving the execution, delivery and performance of this Agreement and the
consummation of the Share Exchange, certified by an appropriate officer of
RMC.
(d) An opinion of counsel to RMC substantially similar in form and
content to the document attached to this Agreement as Exhibit C.
SECTION 10.03. NO MATERIAL ADVERSE CHANGE. There shall not have occurred an
RMC Material Adverse Effect between the date hereof and the Effective Time.
22
SECTION 10.04. NO INJUNCTION, ETC. No action, proceeding, investigation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
Agreement or the consummation of the Share Exchange, or which is related to or
arises out of the business, if such action, proceeding, investigation or
legislation, in the reasonable judgment of Admiralty or its counsel, would make
it inadvisable to consummate such transactions. In the event any order, decree
or injunction shall have been issued, each party shall use its reasonable
efforts to remove any such order, decree or injunction.
SECTION 10.05. CERTIFICATE OF SHARE EXCHANGE. RMC shall have executed and
delivered to Admiralty the certificate of Share Exchange to be filed with the
Secretary of State of the State of Georgia and/or the Secretary of State of the
State of Colorado in connection with the Share Exchange.
SECTION 10.06. TAX-FREE SHARE EXCHANGE. No event outside the control of
Admiralty shall have occurred between the date of this Agreement and the Closing
Date, so as to jeopardize the treatment of the transactions contemplated by the
Share Exchange as a reorganization within the meaning of Section 368(a) of the
Code.
SECTION 10.07. SHAREHOLDER APPROVAL. RMC shall have obtained any and all
consents of their respective shareholders required by any applicable law to
consummate the Share Exchange.
SECTION 10.08. NASDAQ NOTIFICATION. RMC shall have given advance notice of
the Share Exchange to NASDAQ in accordance with Over-the-Counter Electronic
Bulletin Board regulations.
ARTICLE XI
TERMINATION
SECTION 11.01. RIGHT OF TERMINATION. This Agreement and the Share Exchange
may be terminated at any time prior to the Closing Date:
(a) By the mutual written consent of RMC and Admiralty.
(b) by either Admiralty or RMC if the Effective Time shall not have
occurred on or before March 31, 2001; provided, that the party seeking to
terminate this Agreement pursuant to this Section shall not have breached
in any material respect its obligations under this Agreement in any manner
that shall have materially contributed to the failure to consummate the
Share Exchange on or before such date; and
(c) by either Admiralty or RMC if (i) a statute, rule, regulation or
executive order shall have been enacted, entered, promulgated or enforced
by any Governmental Authority prohibiting the consummation of the Share
Exchange substantially on the terms contemplated hereby or (ii) an order,
decree, ruling or injunction shall have been
23
entered permanently restraining, enjoining or otherwise prohibiting the
consummation of the Share Exchange substantially on the terms contemplated
hereby and such order, decree, ruling or injunction shall have become final
and non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section shall have used its reasonable best
efforts to remove such order, decree, ruling or injunction.
SECTION 11.02. EFFECT OF TERMINATION. In the event of termination in
accordance with Section, this Agreement shall become void and of no further
force or effect, without any liability on the part of any of the parties hereto
or their respective owners, directors, officers or employees, except the
obligations of each party to preserve the confidentiality of documents,
certificates and information furnished to such party pursuant thereto and for
any obligation or liability of any party based on or arising from any breach or
default by any such party with respect to his or its particular representations,
warranties, covenants or agreements, as to his or its particular actions or
inactions, contained in the Share Exchange Documents.
ARTICLE XII
SURVIVAL OF TERMS; INDEMNIFICATION
SECTION 12.01. SURVIVAL. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that
(a) the agreements and covenants set forth in this Agreement shall
survive and continue until all obligations set forth therein shall have
been performed and satisfied; and
(b) all representations and warranties shall survive and continue
until two years from the date of Closing.
SECTION 12.02. INDEMNIFICATION BY ADMIRALTY. Subject to this Article XII,
RMC and its Affiliates, including RMC's officers, directors, employees,
shareholders, representatives and agents shall be indemnified and held harmless
by Admiralty at all times after the date of this Agreement, against and in
respect of any and all damage, loss, deficiency, liability, obligation,
commitment, cost or expense (including the reasonable fees and expenses of
counsel) resulting from, or in respect of, any misrepresentation, breach of
warranty, or non-fulfillment of any obligation on the part of Admiralty under
this Agreement, any document relating thereto or contained in any schedule or
exhibit to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, other agreement or instrument by Admiralty hereunder.
SECTION 12.03. INDEMNIFICATION BY RMC. Subject to this Article XII,
Admiralty and its Affiliates, officers, directors, employees, shareholders,
representatives and agents shall be indemnified and held harmless by RMC, at all
times after the date of this Agreement, against and in respect of any and all
damage, loss, deficiency, liability, obligation, commitment, cost or
24
expense (including the reasonable fees and expenses of counsel) resulting from,
or in respect of any misrepresentation, breach of warranty, or non-fulfillment
of any obligation on the part of RMC under this Agreement or from any
misrepresentation in or omission from any certificate, schedule, other agreement
or instrument by RMC hereunder.
ARTICLE XIII
CERTAIN DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
"Affiliate" shall mean, with regard to any Person, (a) any Person, directly
or indirectly, controlled by, under common control of, or controlling such
Person, (b) any Person, directly or indirectly, in which such Person holds, of
record or beneficially, five percent or more of the equity or voting securities,
(c) any Person that holds, of record or beneficially, five percent or more of
the equity or voting securities of such Person, (d) any Person that, through
Contract, relationship or otherwise, exerts a substantial influence on the
management of such Person's affairs, (e) any Person that, through Contract,
relationship or otherwise, is influenced substantially in the management of
their affairs by such Person, or (f) any director, officer, partner or
individual holding a similar position in respect of such Person.
"Agreement" shall mean this Plan and Agreement to Exchange Stock.
"RMC Material Adverse Effect" shall have the meaning set forth in Section
7.01.
"RMC Common Stock" shall mean the common stock, $0.001 par value, of RMC.
"RMC" shall mean Ruby Mining Company, a Colorado corporation.
"Authority" shall mean any governmental, regulatory or administrative body,
agency, arbitrator or authority, any court or judicial authority, any public,
private or industry regulatory agency, arbitrator authority, whether
international, national, federal, state or local.
"Claim" shall mean any action, claim, obligation, liability, expense,
lawsuit, demand, suit, inquiry, hearing, investigation, notice of a violation,
litigation, proceeding, arbitration, or other dispute, whether civil, criminal,
administrative or otherwise, whether pursuant to contractual obligations or
otherwise.
"Closing Date" shall have the meaning set forth in Section 1.02.
"Closing" shall mean the meaning set forth in Section 1.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Effective Time" shall have the meaning set forth in Section 1.03.
25
"GBCC" shall have the meaning set forth in Section 1.03.
"Admiralty Common Stock" shall mean the Common Stock, $.001 par value, of
Admiralty.
"Admiralty" shall mean Admiralty Corporation, a Georgia corporation.
"Intellectual Property" shall mean all letters patent, patent applications,
inventions upon which patent applications have not yet been filed, trade names,
trademarks, trademark registrations and applications, service marks, service
▇▇▇▇ registrations and applications, copyrights and copyright registrations and
applications, both domestic and foreign, owned, possessed or used by Borrower.
"Knowledge" or "known," "to the knowledge of," or similar references shall
mean the actual knowledge of any of the directors, officers or managerial
personnel of Admiralty or RMC with respect to the matter in question, and such
knowledge as any of the directors, officers or managerial personnel of Admiralty
or RMC reasonably should have obtained upon diligent investigation and inquiry
into the matter in question.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance (including, without limitation, any
easement, right-of-way, zoning or similar restriction or title defect), lien
(statutory or other) or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction).
"Share Exchange Documents" shall have the meaning set forth in Section
6.01.
"Share Exchange" shall have the meaning set forth in the Preamble of the
Agreement.
"Person" shall mean any corporation, partnership, joint venture, Admiralty,
syndicate, organization, association, trust, entity, joint stock Admiralty,
unincorporated organization, Authority or natural person.
"Proportionate Share" shall have the meaning set forth in Section 12.07.
"SEC Reports" shall have the meaning set forth in Section 7.06.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shareholders" shall mean all of the holders of the Admiralty Common Stock.
"Subsidiary" shall mean any Person of which a majority of the outstanding
voting securities or other voting equity interests are owned, directly or
indirectly.
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"Admiralty Financial Statements" shall have the meaning set forth in
Section 6.07.
"Admiralty Material Adverse Effect" shall have the meaning set forth in
Section 6.01.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto and including any amendment thereof.
"Tax" shall mean any Federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not, and "Taxes" means any or
all of the foregoing collectively.
Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01. NOTICES.
(a) Any notice sent in accordance with the provisions of this Section
14.01 shall be deemed to have been received (even if delivery is refused or
unclaimed) on the date which is: (i) the date of proper posting, if sent by
certified U.S. mail or by express U.S. mail or private overnight courier;
or (ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail,
addressed as follows:
If to Admiralty: Admiralty Corporation
Suite 810
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
27
Copy to Counsel: ▇▇▇▇▇ ▇▇▇▇ LLP
Peachtree Center South Tower
Suite 2100
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to RMC: Ruby Mining Company
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to Counsel: The Law Office of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this
Section 14.01.
SECTION 14.02. EXPENSES. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including any fees of brokers, finders,
investment bankers or other agents or incurred to obtain a fairness opinion.
SECTION 14.03. FURTHER ASSURANCES. Each party covenants that at any time,
and from time to time, after the Closing, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
SECTION 14.04. WAIVER. Any failure on the part of any party to comply with
any of its obligations, agreements or conditions hereunder may be waived by any
other party to whom such compliance is owed. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
SECTION 14.05. ASSIGNMENT. This Agreement shall not be assignable by any of
the parties hereto without the prior written consent of all other parties.
SECTION 14.06. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns. This
Agreement shall survive the Closing and not be merged therein.
28
SECTION 14.07. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 14.08. ENTIRE AGREEMENT. This Agreement and the Exhibits,
Schedules, certificates and other documents delivered pursuant hereto or
incorporated herein by reference, contain and constitute the entire agreement
among the parties and supersede and cancel any prior agreements,
representations, warranties, or communications, whether oral or written, among
the parties relating to the transactions contemplated by this Agreement. Neither
this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is sought.
SECTION 14.09. GOVERNING LAW; SEVERABILITY. Except as specifically provided
otherwise herein, this Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws. The provisions of this Agreement are severable and
the invalidity of one or more of the provisions herein shall not have any effect
upon the validity or enforceability of any other provision.
SECTION 14.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 14.11. BROKERS AND FINDERS. Ladan Reserve, Inc., has served as a
finder in connection with the Share Exchange. At the Closing, Admiralty shall
pay to Ladan Reserve, Inc., as a finder's fee the sum of Fifty Thousand Dollars
($50,000). Except and specifically provided otherwise in this Section, no party
has employed or otherwise incurred in any manner any liability for any brokerage
fees, agents commissions or finder's fees concerning the transactions
contemplated hereby.
SECTION 14.12. SCHEDULES AND EXHIBITS. All Schedules and Exhibits attached
to this Agreement are by reference made a part hereof.
SECTION 14.13. ENFORCEMENT OF AGREEMENT. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy.
[Remainder of page intentionally left blank]
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[Signature page to Agreement and Plan of Share Exchange]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
RMC:
RUBY MINING COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title Vice President
------------------------------------
ADMIRALTY:
ADMIRALTY CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title Chairman
------------------------------------
USE:
U.S. ENERGY CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title President
------------------------------------
30