AGREEMENT AND PLAN OF REORGANIZATION
MEDALION SERVICES, INC.
ACQUISITION OF
OREX GOLD MINES CORPORATION
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OR REORGANIZATION ("Agreement") is made and entered
into as of this 17th day of February, 1999, by and among Medalion Services, Inc.
("Medalion") , a Delaware corporation with its executive offices located at 0
Xxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxx Xxxx 00000, Orex Gold Mines Corporation
("Orex"), a Delaware corporation, with its executive offices at 0000 Xxxxx xx
Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxx 00000 and all the Shareholders
("Shareholders" as defined and all of whom are listed in Schedule A) of Orex.
PREMISES
All the outstanding capital stock of Orex, Medalion desires to acquire, so
as to make Orex a wholly-owned subsidiary of Medallion and the Shareholders
desire to make a tax-free exchange of their Orex shares for shares of Medalion's
common stock, to be exchanged as set out herein with the said Medalion.
PLAN OF DISTRIBUTION
The Reorganization will comprise the acquisition by Medalion of all the
outstanding capital stock of Orex in exchange solely for a part of Medalion's
voting stock. The Shareholders, as of the Closing (as hereinafter defined), are
the owners of all of the issued and outstanding capital stock of Orex. The
exchange by the Shareholders of the capital stock of Orex for voting common
stock of Medalion shall be made upon and subject to the terms and conditions of
this Agreement hereinafter set forth as is intended to qualify as a tax free
reorganization pursuant to the provisions of Section 3 68(a) (1) (B) of the
Internal Revenue Code of 1954, as amended.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereinafter expressed, it is hereby agreed as follows:
ARTICLE I
RECITALS, EXHIBITS, SCHEDULES
The foregoing recitals are true and correct and, together with the
schedules and exhibits referred to hereafter, are hereby incorporated into this
Agreement by this reference.
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ARTICLE II
EXCHANGE OF SHARES
The Shareholders agree that all of the issued and outstanding shares of
common stock of Orex ("the Orex Stock") shall be exchanged with Medalion for the
issuance by Medalion to the Shareholders, on the basis of a one for one (1:1)
exchange of shares of the common stock of Medalion, U001 par value, per share
for Orex Shares.
ARTICLE III
CLOSING
3.1 Time and Place
The closing of the transactions contemplated by Section 1 hereof shall take
place at the offices of Orex, or such other time and place as the parties hereto
shall agree, no later than February 2 5, 19 99.
3.2 Actions To Be Taken
At the Closing the Shareholders shall assign, transfer, deliver and set
over to Medalion all issued and outstanding Orex Stock duly endorsed and with
any required documentary or stamp taxes affixed at Orex's expense so as to make
Medalion the sole owner thereof, free and clear of all liens, claims and
encumbrances. At the closing, Medalion shall issue and deliver to the
Shareholders, on a one for one (1:1) exchange, New Medalion Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ALL
THE SHAREHOLDERS AND OREX
Orex hereby represents and warrants to Medalion that, with respect to the
Orex Stock and with respect to Orex, effective this date, the representations
listed below are true and correct, and further covenant and agree that, as of
the Closing Date, the following representations will be true and correct. 4.1
Organization and Standing
Orex is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to own its property, to carry out its business as now being
conducted and to enter into and carry out the provisions of this Agreement. Orex
is duly licensed and qualified to do business with all Federal, State and other
governmental agencies as required, to own its properties and to conduct its
business.
4.2 Capitalization
The duly authorized capital stock of Orex consists of 50,000,000 shares of
Common Stock, par value $0.01 per share, of which 5,3 47,42 6 shares are
outstanding, validly issued, fully paid and nonassessable and owned of record by
Orex and its predecessors. Orex is also in the process of a Private Placement
Offering of 1,000,000 Shares of Common Stock, par value $0.01 per share, as of
February 3, 1999. Thus, at the Closing date, there will be an aggregate of 6,3 4
7,426 Orex shares outstanding. There are no other securities of Orex now
outstanding or securities on which it is or may be liable, or securities that
are or may become required to be issued by reason of any statutory requirements
(including, without limitation, preemptive rights), or warrants, rights,
options, calls, commitments or other agreements presently outstanding.
4.3 Corporate Records
A copy of Orex's predecessor corporation: Lucky Seven Gold Mines
Corporation's certificate of incorporation, the amendments thereto, and the
By-Laws, all of which are certified by the Secretary of Orex as of a recent
date, are attached as Schedule 4.3 hereto and each of the foregoing will be
complete, true and correct on the Closing Date. -The minute books of Orex's
predecessor corporation contain complete and accurate records of all corporate
actions. The stock book of Orex's predecessor corporation reflects accurately
the foregoing or, in the event that there have in the past been shareholders of
Orex's predecessor corporation other than Orex, the names of all persons who at
any time in the past were record shareholders of Orex, the number of shares of
capital stock held by each such shareholders and the circumstances of any past
transfers or redemptions of any shares of Orex held prior to the date hereof by
any person otherthan Orex.
4.4 Subsidiaries
Orex owns no securities of any other entity.
4.5 Default Under Loans
Orex is not in default in the payment of principal or interest and has
fully complied with all other covenants, obligations and conditions of all
indebtedness outstanding. Orex
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has no outstanding mortgages, loan agreements or indebtedness of any kind,
nature or description except as set forth on Schedule 4.5 hereto.
4.6 No Agreement or Court Orders
Orex is not a party or subject to or bound by any agreement or any
judgment, order, writ, injunction or decree of any court or governmental body
which contained any provisions which could operate to impair the carrying out of
this Agreement or any of the transactions contemplated hereby.
4.7 Authority
The execution, delivery and performance of this Agreement by Orex has been
duly and effectively authorized by all requisite corporate action and will not
violate any provision of the Certificate of Incorporation or By-Laws of Orex or
any provision of, or result in the acceleration of any obligation under, any
agreement, indenture, instrument, lease, contract or other undertaking to which
Orex is a party or by which it is bound.
4.8 Recent Financial Statements
Orex's predecessor corporation, Lucky Seven Gold Mines Corporation ("Lucky
Seven") and Orex have delivered to Medalion a Balance Sheet of the Company as of
December 31, 1998, (the "Recent Balance Sheet") and the related Statement of
Earnings for the fiscal year then ended (the "Recent Income Statement"). Such
Recent Balance Sheet and Recent Income Statement being hereinafter sometimes
collectively called the "Recent Financial Statement" are unaudited. The Recent
Financial Statements are true, correct and complete and accurately and truly
present the financial condition of Orex as at the date thereof and the results
of its operations for the period therein specified and have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding period and consistently maintained
throughout the periods involved. without limiting the generality of the
foregoing, the Recent Financial Statements, either on the face thereof or in the
notes thereto, include, reflect or disclose all periods involved. Without
limiting the generality of the foregoing, the Recent Financial Statements
disclose all debts, liabilities, commitments and obligations of every nature,
whether absolute, accrued, contingent or otherwise of Orex's predecessor
corporation. Lucky Seven as at the date thereof, including all appropriate
reserves for taxes and there are no other debts of Orex's predecessor
corporation Lucky Seven, or claims or demands with respect thereof, relating to
or arising out of any act, transaction or circumstances which occurred or
existed on or before the date of the Recent Balance Sheet, due or payable,
except as included, reflected or disclosed on the Recent Balance Sheet. The
Recent Income Statement does not contain any item of special or nonrecurring
income or other income not earned in the ordinary course of business except as
expressly specified therein. 4.9 Other Financial Statements
Orex will deliver to Medalion copies of all other financial statements of
Orex, prepared by or for Orex as of a date subsequent to the date of the Recent
Financial Statements, all of which will be true, complete and correct and will
have been prepared in accordance with sound generally accepted accounting
principles consistently followed throughout the period indicated.
4.10 Liabilities and Obligations
All liabilities of Orex and all obligations of Orex with respect to
contracts and commitments which arose or arise after the date of Orex's Recent
Financial Statements and prior to the Closing were or will be incurred only in
the ordinary course of business All liabilities for taxes with respect to the
period after the date of Orex's Recent Financial Statements and prior to the
Closing were or will be incurred in the ordinary course of business. Except to
the extent reflected, included, disclosed or reserved against in Orex's recent
Balance Sheet, or specifically otherwise set forth or on Schedule 4.10, Orex has
no present knowledge of, or present reason to believe in the existence of, any
liability of any kind or nature whether accrued, absolute, contingent or
otherwise, including without limitation, tax liabilities due to or to become
due, with respect to any period after the date of Orex's Recent Balance Sheet
and prior to the date of this Agreement.
4.11 Absence of Changes
Since the date of the Recent Financial Statements, the business of Orex has
been operated and as of the Closing will be operated only in the ordinary course
of business, and without limiting the generality of the foregoing, Orex has not:
(a) Suffered any materially adverse change in its financial condition,
prospects, operations or business.
(b) Increased the rate of compensation payable to any officer, employee or
agent, or granted or accrued any bonus, payment or other benefit due under any
pension, incentive, deferred compensation or similar plan to any such person.
(c) Incurred any labor dispute, work stoppage, sabotage, formal or informal
complaint of unfair labor practices, or had any representational proceedings
initiated, demand made for the recognition of any union as bargaining agent or
any other similar event or condition which has materially and adversely affected
its business.
(d) Incurred any obligation or liability (absolute or contingent) except
current liabilities under contracts entered into in the ordinary course of
business, none or which materially adversely affects the business or prospects
of Orex.
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(e) Discharged or satisfied any lien, encumbrance, obligation or liability
(absolute or contingent) other than current liabilities and obligations shown on
the Recent Financial Statements or incurred since the date of the Recent
Financial statements in the ordinary course of business.
(f) Mortgaged, pledged, or subjected to lien, charge or other encumbrances
any of its assets
(g) Sold, transferred, mortgaged, pledged, or subjected to lien, charge or
other encumbrances any of its assets.
(h) Suffered any extraordinary losses or waived any rights of substantial
value.
(i) Made or declared any distribution or divided to its shareholders with
respect to its capital stock, or otherwise.
(j) Entered into any transaction not in the ordinary course of business
other than this Agreement.
4.12 Taxes
All required federal, states, municipal and local tax returns of Orex have
been accurately prepared and duly and timely filed, and all federal, state and
local taxes required to be paid with respect to the periods covered by such
returns have been paid. All federal, state, municipal and local taxes required
to be paid with respect to any period prior to the date of Orex's Recent Balance
Sheet have been reflected and fully reserved for on Orex's Recent Financial
Statements. Orex has no tax deficiency outstanding, proposed or assessed against
it and has not executed any waiver of any statute of limitations on the
assessment or collection of any tax. Orex's federal income tax returns have not
been audited by the Internal Revenue Service.
4.13 Title to Properties
Schedule 4.13 provides a list of all the properties and assets of Orex.
Orex has good and marketable title to all the properties and assets its purports
to own, including, without limitation, those reflected in its books and records
and in its Recent Financial statements (except assets thereafter sold in the
ordinary course of business). Such properties and assets are not subject to any
mortgage, pledge, lien, charge, security interest, encumbrance, restriction,
lease, license, easement, charge, liability or claim of any nature whatsoever,
direct or indirect, whether accrued, absolute, contingent or otherwise, except
those which are included, reflected or expressly set forth in its Recent
Financial Statements. All of such properties and assets are in good operating
condition and repair and conform to all applicable ordinances, regulations and
other laws or requirements. All of Orex's fixtures and improvements to real
property, and its use of real property, conform in all material respdcts with
all applicable building, zoning and other laws, ordinances, orders and
regulations and applicable public and private covenants or restrictions.
4.14 Title to Stock
The Shareholders, the owners of Orex Stock, whose stock constitutes all of
the capital stock of Orex, issued and outstanding, and all whose stock will be
delivered by the Shareholders hereunder, free and clear of all liens, pledges,
encumbrances, charges, agreements or claims by or on the part of any persons,
firm or corporation, and the Shareholders have good and marketable title thereto
with full right and unrestricted power to assign ,transfer and deliver such
stock to Medalion as provided in this Agreement. No right or option to purchase
any of the Orex Stock or any other securities of Orex exists in favor of any
person, firm or corporation.
4.15 Agreements
Orex entered into a non-exclusive License Agreement with Xxxxx, Inc., a
Delaware corporation, on March 13, 1997 for the licensed use of the Xxxxx Gold
Process. Orex also entered into a Consulting Agreement with XxxxxxxXxxxx.xxx, a
Delaware corporation, on October 2 8,199 8 for the contracting and retaining of
Xxxxxxxxxxxx.xxx in a financial public relations consulting and servicing
capacity.
Orex is not in default under any contract, agreement or commitment. No
consent of third parties to any contract, agreement or commitment of Orex is
required for the execution or consummation of this Agreement.
4.16 Indebtedness of Officers and Directors
Orex is not indebted to any other person who is or has been an officer,
director, or stockholder of Orex, or to any member of the immediate family of
any such person.
4.17 Litigation
There are no claims, legal actions, suits, arbitrations, governmental
investigations or other legal or administrative proceedings in progress or
pending or to the knowledge of Orex threatened against or relating to Orex, its
properties, assets or business and Orex does not know or have reason to be aware
of any facts which might result in any such claim, action, suit, arbitration or
other proceeding.
4.18 Pension or Benefit Plans
Orex has no formal or informal written or unwritten pension,
profit-sharing, stock option, bonus plan or employee benefit or welfare plans of
any kind whatsoever, or agreements with any persons for the making or granting
of any pension, profit sharing or bonus payments or benefits or any stock
options.
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4.19 Relations and Labor
Orex is not a party to any collective bargaining agreements and there is no
union or collective bargaining agent for Orex's employees. Orex has no
employment grievances, disputes, or controversies and there are no threats of
strikes or work stoppage or demand for the recognition of any union or
bargaining agent for any employees.
4.20 Patents
Orex has no patents or patents pending. To the best of Orex's knowledge,
Orex is not infringing upon or otherwise acting adversely to any copyrights,
trademarks, trademark rights, patents, patent rights or licenses owned by any
person or persons, and there is no such claim or action pending or threatened,
with respect thereto.
4.21 Good Standing
Each License, permit, franchise and authorization of Orex from any federal,
state or local governmental or other regulatory authority is in good standing
and in full force and effect. Orex does not know of any reason which could cause
any of the above to be terminated. There shall not be any termination or
suspension after the Closing date of any or all of the above arising out of,
relating to, or caused by (i) any failure to file, or any inadequacy in filing
of, any documents, reports and disclosures required under applicable rules and
regulations of any federal, state or local law or agency to be filed by Orex
prior to the Closing Date, (u) activities of Orex or its personnel prior to the
Closing date, (iii) any other failure to comply with applicable rules and
regulations prior to the Closing date, or (iv) this Agreement or the
transactions contemplated by this Agreement.
4.22 Compliance with Law
To the best of Orex's knowledge, Orex has complied with all federal, state
and local applicable laws, rules, regulations, ordinances and orders applicable
to its business or properties including, without limitation, those of any agency
or subdivision thereof Orex has duly filed all returns, reports, registration
statements and other documents and furnished all information required or
requested by any federal, state or local governmental agency having jurisdiction
with respect to Orex or its business or properties and all of the foregoing are
true and complete in all respects and all payments, fees and charges reflected
therein as due, or upon any deficiency notice with respect thereto, have been
paid. No act of-Orex, including without limitations the issuance and transfers
of the capital stock of Orex, required registration under the Securities Act of
193 3, as amended.
4.23 Continuance of Business
The businesses now conducted by Orex are substantially the same as the
respective businesses conducted by it throughout the periods covered by its
respective financial
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statements referred to in Section 4.8 and 4.9 hereof, and there has been no
material change during any of such periods in the type or nature of its
respective services, products, customers, suppliers or methods of operation.
Orex has not received any notification and has no reason to believe that any
persons or businesses with whom Orex does business will cease doing business, or
any portion of any business, with Orex.
4.24 Adverse Facts
No facts are known to Orex which would materially and adversely affect
future operations of Orex.
4.25 Brokers
Orex's negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Orex directly with Medalion in such
manner, without the intervention of any third parties so as not to give rise to
any valid claims against any of the parties hereto for a brokerage commission or
other like payment.
4.26 No Misrepresentation or warranty by Orex in this Agreement or any
statement or certification furnished or to be furnished to Medalion pursuant to
this Agreement or in connection with the transaction contemplated hereby,
contains or will contain any untrue statement of material facts or omits or will
omit a materiel fact necessary to make the statements contained herein true and
correct.
4.27 Exemption from Registration; Investment Intent.
The Shareholders acknowledge that the Medalion Shares have not been
registered under the Securities Act of 1933, as amended (the "Act(degree)) in
reliance on an exemption for transactions by an issuer not involving a public
offering. The Shareholders understand that they may not dispose of all or any
part of the Medalion Shares except in compliance with the provisions of the Act
and applicable state securities laws, and understands that the Medalion Shares
are being issued pursuant to a specific exemption under the provisions of the
Act, which exemption(s) depends, among other things, upon the compliance with
the provisions of the Act. Each Shareholder represents that the Medalion Shares
to be issued to them pursuant to this Agreement are being acquired solely for
the account of the Shareholder for personal investment and not with a view to,
or for resale in connection with, any distribution in any jurisdiction where
such sale or distribution would be precluded. By such representation, the
undersigned means that no other person has a beneficial interest in the Medalion
Shares. The Shareholders understand that the sale of the Medalion Shares is
subject to the restrictions as imposed under state and federal securities laws.
The Shareholders further represent and agree
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that they will not sell, transfer, pledge or otherwise dispose of or encumber
the Medalion Shares except pursuant to the applicable rules and regulations
under applicable state securities laws and the Act, and prior to any such sale,
transfer, pledge, disposition or encumbrance, each will, if requested, furnish
Medalion and its transfer agent with an opinion of counsel, satisfactory in form
and substance, that registration under applicable state securities laws and the
Act is not required. The Shareholders hereby understands that the following or
similar legend will appear on the face of the certificates evidencing the
Medalion Shares in compliance with the Act and applicable state securities laws:
"These securities have not been
registered under the Securities Act of 1933,
as amended (the "Act") or any state
securities laws and may not be sold or
otherwise transferred or disposed of except
pursuant to an effective registration
statement under the Act and any applicable
state securities laws, or the Company
receives an opinion of counsel satisfactory
to counsel to the Company that an exemption
from registration under the Act and any
applicable state securities laws is
available."
Until December 31, 1999, the Orex Shareholders will not authorize, approve or
consent to a reverse split or other dilutive event effecting Medalion's
outstanding common stock as of the date hereof,
ARTICLE V
REPRESENTATION AND WARRANTIES BY MEDALION
Medalion hereby represents and warrants as follows:
5.1 Organization and Standing
Medalion is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own its property, to carry out its business as
now being conducted and to enter into and carry out the provisions of this
Agreement. Medalion is duly licensed and qualified to do business with all
Federal, State and other governmental agencies as required to own its properties
and to conduct its business. Medalion owns no property and neither conducts, nor
caries on any new business.
5.2 Capitalization
The duly authorized capital stock of Medalion consists of Five Million
(5,000,000) shares, par value $.0001 per share of Common Stock. However,
Medalion is in the process of an increase and will have, on the Closing date,
Fifty Million (50,000,000)
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shares, par value $.0001 per share of Common Stock, of which 8,075,000 are
currently outstanding. There are no other securities of Medalion now outstanding
or securities on which it is or may be liable, or securities that are or may
become required to be issued by reason of any statutory requirements (including,
without limitation, preemptive rights), or warrants, rights, options, calls,
commitments or other agreements presently outstanding.
5.3 Corporate Records
A copy of Medalion's certificate of incorporation, all amendments thereto,
and the By-Laws, all of which are certified by the Secretary of Medalion as of a
recent date are attached as Schedule 5.3 hereto and each of the foregoing will
be complete, true and correct on the Closing date. The minute books of Medalion
contain complete and accurate records of all meetings of its stockholders and
directors and of all corporate action taken by them to the extent available as
at the present date. The shareholder records of Medalion reflect accurately the
names of the record shareholders of Medalion and the number of shares of capital
stock held by each stockholder.
5.4 Subsidiaries
Medalion owns no security of any other entity.
5.5 Default Under Loans
Medalion has no pre or post bankruptcy liabilities and federal tax
liabilities not exceeding $-0-in the aggregate.
5.6 Title to Properties
Schedule 5.6 provides a list of all the properties and assets of Medalion.
Medalion has good and marketable title to all the properties and assets its
purports to own, including, without limitation, those reflected in its books and
records and in its Recent Financial statements (except assets thereafter sold in
the ordinary course of business). Such properties and assets are not subject to
any mortgage, pledge, lien, charge, security interest, encumbrance, restriction,
lease, license, easement, charge, liability or claim of any nature whatsoever,
direct or indirect, whether accrued, absolute, contingent or otherwise, except
those which are included, reflected or expressly set forth in its Recent
Financial Statements. All of such properties and assets are in good operating
condition and repair and conform to all applicable ordinances, regulations and
other laws or requirements. All of Medalion's fixtures and improvements to real
property, and its use of real property, conform in all material respects with
all applicable building, zoning and other laws, ordinances, orders and
regulations and applicable public and private covenants or restrictions.
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5.7 Tradable Stock
All or some of Medalion's Common Stock is approved for quotation and
currently quoted and traded publicly on the Over the Counter Bulletin Board
(OTCBB) in accordance with applicable SEC rules and regulations.
5.8 Information Furnished
Management of Medalion has been furnished and has reviewed Orex's
Confidential Private Placement Memorandum dated February 3,1999 in connection
with the then proposed sale of up to 1,000,000 shares of the Orex's Common
Stock.
5.9 Proposed Rule 504 Offering Medalion, under the control of the Orex's
shareholders agrees to undertake to complete, immediately following the Closing
Date, a private offering of its shares of Common Stock pursuant to Rule 504 of
the Act to raise up to an aggregate of $1,000,000.
5.10 Default Under Loans
Medalion is not in default in the payment of principal or interest and has
fully complied with all other covenants, obligations and conditions of all
indebtedness outstanding. Medalion has no outstanding mortgages, loan agreements
or indebtedness of any kind, nature or description except as set forth on
Exhibit 5.10 hereto.
5.11 No Agreements or Court Orders
Medalion is not a party to or subject to or bound by any agreement or any
judgment, order, writ, injunction or decree of any court or governmental body
which contains any provisions which could operate to impair the carrying out of
this Agreement or any of the transactions contemplated hereby.
5.12 Authority
The execution, delivery and performance of this Agreement by Medalion has
been duly and effectively authorized by all requisite corporate action and will
not violate any provision of the Certificate of Incorporation or By-Laws of
Medalion or any provision of, or result in the acceleration of any obligation
under, any agreement, indenture, instrument, lease, contract or other
undertaking to which Medalion is a party or by which it is bound.
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5.13 Financial Statements
Prior to the Closing Date, Medalion will deliver to Orex financial
statements (the "Medalion Financial Statements") through to December 31, 199 8
which will show that Medalion has no assets and has post bankruptcy liabilities
and federal tax liabilities not exceeding $-0-in the aggregate.
Financial Statements will be true, correct and complete and will accurately
and truly present the financial condition of Medalion as at the date thereof and
the results of its operations for the period therein specified and will be
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with that of the preceding period and consistently maintained
throughout the periods involved. Without limiting the generality of the
foregoing, the Medalion Financial Statements will disclose all debts,
liabilities, commitments and obligations of every nature, whether absolute,
accrued, contingent or otherwise of Medalion as at the date thereof, and there
will be no other debts, claims, or demands relating to or arising out of any
act, transaction or circumstances which will have occurred or existed on or
before the date of the Medalion Financial Statements.
5.14 Agreements
Medalion is not in default under any contract, agreement or commitment and
is not a party to any contract, agreement or commitment. No consent of third
parties to any contract, agreement or commitment of Medalion is required for the
execution or consummation of this Agreement.
5.15 Competing Interests
None of Medalion's principal shareholders (owning 5 % or more of its issued
and outstanding common stock), officers or directors, own, directly or
indirectly, a material interest in any corporation, partnership, firm or
association which is a competitor or potential competitor of Orex.
5.16 Indebtedness of Officers and Directors
Medalion is not indebted to any person who is or has been an officer,
director or stockholder of Medalion, or to any member of the immediate family of
any such person.
5.17 Litigation
There are no claims, legal actions, suits, arbitrations, governmental
investigations or other legal or administrative proceedings in progress or
pending or to the knowledge of Medalion threatened against or relating to
Medalion, its assets of activities and Medalion
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knows nothing nor has any reason to be aware of any facts which might result in
any such claim, action, suit, arbitration or other proceeding.
5.18 Adverse Facts
No facts are known to Medalion which would materially and adversely affect
future activities of Medalion.
No Misrepresentation or warranty by Medalion in this Agreement or any
statement or certification furnished or to be famished to Orex pursuant to this
Agreement or in connection with the transaction contemplated hereby, contains or
will contain any untrue statement of material facts or omits or will omit a
materiel fact necessary to make the statements contained herein true and
correct.
5.19 Brokers
Medalion's negotiations relative to this Agreement and the transaction
contemplated hereby have been carried on by Medalion directly with Orex in such
manner, without the intervention of any third parties, as not to give rise to
any valid claims against any of the parties hereto for a brokerage commission or
other like payments.
5.20 Confidential Information
Medalion shall not, prior to or after the Closing divulge to third parties
any confidential information received from Orex.
ARTICLE VI
CONDUCT OF OREX'S BUSINESS PRIOR TO THE CLOSING
6.1 Negative Covenants
Orex agrees that between the date hereof and the Closing, and except as
permitted by the prior written consent of Medalion, Orex will not take, or
permit to betaken, any of the following actions:
(a) Alter or amend its Certificate of Incorporation or By-Laws.
(b) Issue or become obligated to issue any securities of any kind including
without limitation any notes or capital stock.
(c) Enter into any option, call or commitment with respect to its stock.
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(d) Declare or pay any dividend or other distribution with respect to its
capital stock.
(e) Incur any liability or obligation, except current liabilities in the
ordinary course of business and obligations under contracts entered into in the
ordinary course of business.
(f) Pay or accrue any salaries, fees, commissions or other compensation to
its officers or directors at a rate in excess of the rate of compensation in
effect as to such individual, respectively, on the date hereof
(g) Enter into any contract or commitment which is not the ordinary course
of business of Orex or which does, or could be expected to, materially adversely
affect Orex's business.
(h) Borrow funds or incur any indebtedness of any nature except in the
ordinary court of business.
(i) Change its banking and safe deposit arrangements
(j) Accept, amend or grant any license, patent or trademark, or settle the
infringement of any trademark or patent.
(k) Compromise or settle any litigation, proceeding or governmental
investigation against it or its properties or business, except settlements made
by insurers.
6.2 Affirmative Covenants
Orex agrees that between the date hereof and the Closing, Orex will:
(a) Conduct its business only in the ordinary course and at the place or
places said business is conducted.
(b) Maintain in force the insurance policies presently in force or
insurance policies providing substantially the same coverage, under which Orex
is the insured or the beneficiary.
(c) Preserve its business organization taken as a whole substantially
intact, keep available the services of its present officers and employees and
preserve the good will of its suppliers, customers and others having business
relations with any of them.
(d) Afford to Medalion and its counsel, accountants, and other
representatives full access during normal business hours throughout the period
prior to the Closing to all of Orex's properties, books, contracts, commitments
and records, and during said period furnish all information which Medalion may
reasonably request.
16
ARTICLE VII
CONDUCT OF MEDALION'S CORPORATE AFFAIRS PRIOR TO THE
CLOSING
7.1 Negative Covenants
Medalion agrees that between the date hereof and the Closing, and except as
permitted by the prior written consent of Orex, Medalion will not take, or
permit to be taken, any of the following actions:
(a) Initiate or engage in any new business activities of any kind
whatsoever.
(b) Alter or amend its Certificate of Incorporation or By-Laws.
(c) Issue or become obligated to issue and securities of any kind including
without limitation any notes or capital stock.
(d) Enter into any option, call or commitment with respect to its capital
stock.
(e) Declare or pay any dividend or other distribution with respect to its
capital stock.
(f) Incur any liability or obligation, except current liabilities in the
ordinary course of its activities.
(g) Pay or accrue any salaries, fees, commissions or other compensation to
its officers or directors.
(h) Make any profit sharing, incentive, pension or retirement payment.
(i) Enter into any contract of commitment.
(j) Borrow funds or incur any indebtedness.
(k) Compromise or settle any litigation, proceeding or governmental
investigation against it or its properties or business.
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7.2 Affirmative Covenants
Medalion agrees that between the date hereof and the Closing, Medalion
will:
(a) Preserve its organizations taken as a whole substantially intact, keep
available the services of its present officers and personnel.
(b) Afford to Orex and its counsel, accountants, and other representatives
full access during normal business hours throughout the period prior to the
Closing to all of Medalion's properties, books, contracts, commitments and
records, and during said period furnish all information which Orex may
reasonably request.
ARTICLE VIII
CONDITIONS PRECEDENT TO MEDALION'S OBLIGATIONS
Medalion's obligations under this Agreement are subject to the fulfillment
prior to the Closing of each of the following conditions:
8.1 Orex's representations and warranties contained in this Agreement and
in any certificate or document delivered to Medalion pursuant hereto shall be
deemed to have been made again at and as of the time of the Closing and shall
then be true in all materiel respect; Orex shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
8.2 Orex shall not be a defendant in any suit or proceeding or governmental
investigation pending or threatened against Orex which would materially affect
the business of Orex or the carrying out of this Agreement.
8.3 Orex has not incurred any material adverse change in its assets,
liabilities, financial condition, business, prospects or operations since the
execution of this Agreement.
8.4 Orex shall deliver to Medalion a certified copy of the resolution of
its Board of Directors approving this Agreement and the transaction contemplated
hereby.
8.5 All documents required to be delivered to Medalion at or prior to the
Closing shall have been so delivered.
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ARTICLE IX
CONDITIONS PRECEDENT TO OREX
AND OREX'S OBLIGATIONS
Orex's obligations under this Agreement are subject to the fulfillment
prior to the Closing of the following conditions:
9.1 Medalion's representation and warranties contained in this Agreement
and in any certificate of document delivered to Orex pursuant hereto shall be
deemed to have been made again at and as of the time of the Closing and shall
then be true in all material respects; Medalion shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing; and Orex shall have
been furnished with a certificate of Medalion dated the Closing date, certifying
in such detail as Orex may reasonably request to the fulfillment of the
foregoing conditions.
9.2 Medalion shall not be a defendant in any suit or proceeding or
governmental investigation pending or threatened against Medalion which would
materially affect the carrying out of this Agreement.
9.3 Medalion shall not have incurred any adverse change in its assets,
liabilities, financial condition, activities, prospects or operations.
9.4 Medalion shall deliver to Orex a certified copy of the resolutions of
its Board of Directors approving this Agreement and the transactions
contemplated hereby.
9.5 All documents required to be delivered to Orex at or prior to the
Closing shall have been so delivered.
ARTICLE X
MISCELLANEOUS
10.1 Survival
All representations, warranties, covenants and agreements made by any of
the parties hereto in this Agreement or in any certificate or instrument
delivered by or on behalf of any of them pursuant hereto shall survive the
execution and delivery of this
19
Agreement, any investigation that may have been made or may be made at any time
by or on behalf of any party hereto, and the consummation of this Agreement.
10.2 Parties in Interest
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by each corporate party hereto and its successors and each
individual party hereto and his heirs, personal representatives and successors.
This Agreement shall not be assigned by any party hereto (except by operation of
law) and any such prohibited assignment shall be null and void.
10.3 Expenses and Reorganization
Each of the parties to this Agreement shall bear their respective expenses
relating to this Agreement.
10.4 Governing Law
This Agreement shall be governed by and construed and enforced under the
laws of the State of Delaware.
10.5 Entire Agreement
This Agreement contains the entire understanding of the parties hereto with
respect to the subject mater herein contained and no amendment, modification or
termination of this Agreement shall be valid unless expressed in a written
instrument executed by the parties hereto or their respective successors.
10.6 Exhibits
All Exhibits and Schedules to this Agreement or other certificates or
documents delivered pursuant to this Agreement shall be deemed to be a part of
this Agreement, whether or not required to be annexed hereto, and shall be
initialed by the party required to deliver such Exhibit, certificate or
document.
10.7 Waiver
No waiver or any provision of, or any breach or default of this Agreement,
shall be considered valid unless in writing and signed by the party giving such
waiver and no waiver shall be deemed a waiver of any other provisions or any
subsequent breach or default of a similar nature.
20
10.8 Further Assurances
Each party to this Agreement will, at the request of the other, execute and
deliver to such other party all further endorsements and documents as such other
party may reasonably request in order to consummate and perfect the transactions
contemplated by this Agreement.
10.9 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which taken together shall constitute
one and the same instrument.
10.10 Headings
Section headings are contained on this Agreement only for purposes of
convenience of reference and shall not affect the interpretation of this
Agreement or modify any of its terms or provisions.
10.11 Notices
Any notice or other communication permitted or required to be given
hereunder shall be in writing and shall be deemed to have been given upon
receipt by first class registered mail, certified mail, recognized over-night
courier, in all class and written confirmation of receipt required, addresses to
the parties as set forth below:
ARTICLE X1
CONFIDENTIALITY AND COMPETITION
11.1 Confidential Information and Competition as to the Orex HGP.
(a) Confidential Information. Orex and the Shareholders (collectively, the
"Covenantor") hereby acknowledges that they possess a Licensing Agreement to
confidential information of a special and unique nature and value affecting and
relating to the Business, the Assets, the Orex operations all of which
information is included in the Assets including, but not limited to, the
identity of Orex's customers and suppliers, prices paid by Orex for inventory,
its business practices, marketing strategies, expansion plans, Orex Contracts,
business records and other records, trade secrets, inventions, techniques used
in Orex's business, know-how and technologies, whether or not patentable, and
other similar information relating to the Business (all the foregoing regardless
of whether same is or becomes known to third parties is hereinafter referred to
collectively as "Confidential Information"). The Covenantor further
21
recognizes and acknowledges that, upon Closing, and except as provided in the
License Agreement between Orex and Elbe, Inc, all Confidential Information is
the exclusive property of Medalion, is material and confidential, and greatly
affects the legitimate business interests, goodwill and effective and successful
conduct of the Business and Medalion. Accordingly, the Covenantor hereby
covenants and agrees that it will use the Confidential Information only for the
benefit of the Business and shall not at any time, directly or indirectly,
divulge, reveal or communicate any Confidential Information to any person, firm,
corporation or entity whatsoever other than Medalion or as otherwise
contemplated herein, or use any Confidential Information for its own benefit or
for the benefit of others.
(b) Non-Competition. The parties hereto hereby acknowledge and agree that
Medalion would suffer irreparable injury if the Covenantor competes with
Medalion. As a material inducement to Medalion to enter into this Agreement, the
Covenantor hereby covenants and agrees that the Covenantor shall not:
(i) during the period beginning on the Closing Date and
continuing unto two (2) years following the termination of
employment of covenants with Medalion or its affiliates, for any
reason, directly or indirectly, operate, organize, maintain,
establish, manage, own, participate in, or in any manner
whatsoever, individually or through any corporation, firm or
organization of which the Covenantor shall be affiliated in any
manner whatsoever, have any interest in, whether as owner,
operator, partner, stockholder, director, trustee, offcer,
lender, employee, principal, agent, consultant or otherwise, any
business or venture other than Medalion in any county or city
anywhere in the world where Medalion does business, which engages
in the business or is otherwise in competition with Medalion or
any assigns of Medalion, unless such activity shall have been
previously agreed to in writing by Medalion and its successors
and assigns;
(ii) during the period beginning on the Closing Date and
continuing until two (2) years Allowing the termination of
employment convenants with Medalion or its affliates, for any
reason, directly or indirectly, divert business from Medalion or
its successors or assigns, or solicit business from, divert the
business of, or attempt to convert to other methods of using the
same or similar services as are provided by Medalion, any client
or account of Medalion; or
(iii) during the period beginning on the Closing Date hereof
and continuing until two (2) years following the termination of
employment convenants with Medalion or its affiliates, for any
reason, directly or indirectly, solicit for employment, employ or
otherwise engage the services of, any employees or consultants of
Medalion or its successors or assigns.
The covenants set forth in this Section 11.1 are in addition to and not in
lieu of any other noncompetition agreement to which Medalion and the Covenantor
are parties.
11.2 Injunction and Attorneys' Fees. In view of the irreparable injury to
Medalion that would result from a breach or threatened breach by the Covenantor
of the covenants or
22
agreements under Section 11.1 hereof, and because there is not an adequate
remedy at law to protect Medalion from the ongoing breach of those covenants,
Medalion shall have the right to receive, and the Covenantor hereby consents to
the issuance of, a permanent injunction enjoining the Covenantor from any
violation of the covenants set forth in Section 11.1 hereof The Covenantor
acknowledges that a permanent injunction is an appropriate remedy for such a
breach or threatened breach. These remedies shall be in addition to and not in
limitation of any other rights or remedies to which Medalion is or may be
entitled at law or in equity under this Agreement. The Covenantor further agrees
that in the event Medalion incurs any fees or costs in order to enforce the
provisions of Section 11.1 hereof and Medalion prevails in such enforcement, the
Covenantor shall pay all fees and costs so incurred by Medalion including, but
not limited to, reasonable attorneys' and paralegals' fees.
11.3 Reasonableness of Restrictions. The Covenantor has carefully read and
considered the provisions of Sections 11.1 and 11.2 hereof and, having done so,
agrees that the covenants set forth in those sections are fair and reasonable
and are reasonably required to protect the legitimate business interests of
Medalion, including, but not limited to, protection of the goodwill included in
the Assets. The Covenantor agrees that the covenants set forth in Sections 1 1.1
and 1 1.2 hereof do not unreasonably impair the ability of the Covenantor to
conduct any unrelated business or to find gainful work in their respective
fields. The parties hereto agree that if a court of competent jurisdiction holds
any of the covenants set forth in Section 11.1 unenforceable, the court shall
substitute an enforceable covenant that preserves, to the maximum lawful extent,
the scope, duration and all other aspects of the covenant deemed unenforceable,
and that the covenant substituted by the court shall be immediately enforceable
against the Covenantor. The foregoing shall not be deemed to affect the right of
the parties hereto to appeal any decision by a court concerning this Agreement.
The provisions of Sections 11.1, 11.2 and 11.3 hereof shall survive the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
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To: MEDALION SERVICES, INC.
0 Xxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
To: OREX GOLD MINES CORPORATION
0000 Xxxxx xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Each of the foregoing shall be entitled to specify a different address by giving
notice as aforesaid to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first written above.
MEDALION SERVICES INC.
BY: /s/
------------------------
OREX GOLD MINES CORPORATION
BY:
------------------------
OREX SHAREHOLDERS
BY:
------------------------
Xxxxxx Xxxxxxxxxx
BY:
------------------------
Xxxxxx Xxxx
25
To: MEDALION SERVICES, INC.
0 Xxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
To: OREX GOLD MINES CORPORATION
0000 Xxxxx xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Each of the foregoing shall be entitled to specify a different address by giving
notice as aforesaid to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first written above.
MEDALION SERVICES INC.
BY:
------------------------
OREX GOLD MINES CORPORATION
BY:
------------------------
OREX SHAREHOLDERS
BY: /s/
------------------------
Xxxxxx Xxxxxxxxxx
BY:
------------------------
Xxxxxx Xxxx
26
BY:
----------------------
Xx. Xxxxx Xxxxxxxxx
BY:
----------------------
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY:
TITLE:
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY:
Xxxxx Xxxxxxxxx
BY:
Xxxxxx and Xxxxxxx Xxxxx
BY:
Xxxxxx Xxxxxxxxxx
BY:
Xxxxxx Xxxxx
BY:
Xxxxxxx Xxxxxxx
27
BY: /s/ Xxxxx Xxxxxxxxx
Xx. Xxxxx Xxxxxxxxx
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY: /s/ Xxxxxx Xxxxx
TITLE: CEO, Xxxxx Inc.
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
BY: /s/ Marilvn Xxxxx
Xxxxxx and Xxxxxxx Xxxxx
BY /s/Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
BY: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
BY: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
25
BY: /s/ Xxxxx Xxxxxxxxx
Xx. Xxxxx Xxxxxxxxx
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY: /s/ Xxxxxx Xxxxx
TITLE: CEO, Xxxxx Inc.
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY:/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
BY:/s/ Marilvn Xxxxx
Xxxxxx and Xxxxxxx Xxxxx
BY /s/Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
BY: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
BY: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
25
BY: /s/ Xxxxx Xxxxxxxxx
Xx. Xxxxx Xxxxxxxxx
BY: /s/Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY: /s/ Xxxxxx Xxxxx
TITLE: CEO, Xxxxx Inc.
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
BY: /s/ Xxxxxxx Xxxxx
Xxxxxx and Xxxxxxx Xxxxx
BY /s/Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
BY: /s/ Xxxxxx vas
Xxxxxx Xxxxx
BY: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
25
BY: /s/ Xxxxx Xxxxxxxxx
Xx. Xxxxx Xxxxxxxxx
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY: /s/ Xxxxxx Xxxxx
TITLE: CEO, Xxxxx Inc.
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
BY: /s/ Xxxxxxx Xxxxx
Xxxxxx and Xxxxxxx Xxxxx
BY /s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
BY: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
BY: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
25
BY: /s/ Xxxxx Xxxxxxxxx
Xx. Xxxxx Xxxxxxxxx
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
XXXXX, INC.
BY:/s/ Xxxxxx Xxxxx
TITLE: CEO, Xxxxx Inc.
XXXXXXXXXXXX.XXX
BY:
TITLE:
BY: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
BY: /s/ Xxxxxxx Xxxxx
Xxxxxx and Xxxxxxx Xxxxx
BY /s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
BY: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
BY: /s/Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
25
