SHARE EXCHANGE AGREEMENT
THIS "AGREEMENT", deemed to be made and entered into this 12th day of July,
2002, constitutes the full agreement between the parties with respect to the
share exchange between said parties that it is intended to memorialize; to-wit:
PARTIES:
The parties hereto are as follows:
1. QUANTUM TECHNOLOGY GROUP, INC., hereinafter referred to as "Quantum", is a
corporation organized and existing under the laws of the State of Idaho,
with principal offices located at 000 Xxxx 00xx Xx., Xxxxx Xxxxx, Xxxxx
00000.
2. THE SHAREHOLDERS OF QUANTUM, collectively owning of record and beneficially
the 1,000,000 issued and outstanding shares of the capital stock of
Quantum, whose individual names, addresses, their share holdings in Quantum
and the share holdings in Silver Butte Mining Company that they are to
receive appear in Exhibit "A" annexed to this Agreement, hereinafter
referred to as the "Quantum Shareholders."
3. SILVER BUTTE MINING COMPANY, hereinafter referred to as "Silver Butte" is a
corporation organized and existing under the laws of the State of Idaho,
whose registered office is located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
00000.
TERMS OF AGREEMENT:
1. Description of the Transaction.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as defined in Section 1(c)), a share exchange
shall occur whereby the Quantum Shareholders shall exchange their shares of the
common stock of Quantum for common shares of Silver Butte, (the "Exchange"). The
exchange of shares shall be the only consideration in the Exchange; no boot
shall be paid to any party.
(b) The Exchange shall have the effects set forth in this Agreement and in
the applicable provisions of the Idaho Business Corporation Act ("Idaho Law").
(c) The consummation of the transaction contemplated by this Agreement (the
"Closing") shall take place at The City Forum, 000 Xxxxx Xx., Xxxxxxxxx, Xxxxx,
on or before August 30, 2002, or at such other time and/or place as the parties
may agree (the "Scheduled Closing Time"). (The date on which the Closing
actually takes place is referred to in this Agreement as the "Closing Date.")
Contemporaneously with or as promptly as practicable after the Closing, properly
executed articles of merger (the "Articles of Merger"), conforming to the
requirements of Idaho Law, shall be filed with the Secretary of State of the
State of Idaho, if applicable. The Exchange shall become effective at the time
such Articles of Merger are filed with and accepted by the Secretary of State of
the State of Idaho (the "Effective Time").
(d) The stock of Quantum shall be converted into stock of Silver Butte as
follows:
(1) Subject to Sections 1(f)(3) and (g), at the Effective Time, by
virtue of the Exchange and without any further action on the part of the
parties, each share of common stock of Quantum issued and outstanding
immediately prior to the Effective Time (the "Quantum Shares") shall be
converted into the right to receive fifty (50) shares of common stock of
Silver Butte (the "Silver Butte Stock"). The Silver Butte Stock to be
received by the Quantum Shareholders is set forth on Exhibit "A" .
If, between the date of this Agreement and the Closing Date, the
Quantum Shares or the Silver Butte Stock are changed into a different
number or class of shares by reason of any stock dividend, subdivision,
reclassification, recapitalization, split-up, combination or similar
transaction, the Silver Butte Stock to be received by the Quantum
Shareholders shall be appropriately adjusted.
(2) If any Quantum Shares outstanding immediately prior to the
Effective Time are unvested or are subject to a repurchase option, risk of
forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with Quantum, then the shares of
Silver Butte Stock issued in exchange for such Quantum Shares will also be
unvested and subject to the same repurchase option, risk of forfeiture or
other condition, and the certificates representing such shares of Silver
Butte Stock may be accordingly marked with appropriate legends.
(e) At the Effective Time, holders of certificates representing Quantum
Shares that were outstanding immediately prior to the Effective Time shall cease
to have any rights as stockholders of Quantum, and the stock transfer books of
Quantum shall be closed with respect to all Quantum Shares outstanding
immediately prior to the Effective Time. No further transfer of any Quantum
Shares shall be made on such stock transfer books after the Effective Time. If,
after the Effective Time, a valid certificate previously representing any of
such capital stock of Quantum (an "Quantum Stock Certificate") is presented to
Silver Butte, such Quantum Stock Certificate shall be canceled and shall be
exchanged as provided in Section 1(f).
(f) (1) At or as soon as practicable after the Effective Time, Silver
Butte will send to each holder of a Quantum Stock Certificate a letter of
transmittal and instructions for use in customary form and containing such
provisions as may reasonably be required for use in effecting the surrender
of such Quantum Stock Certificate for payment therefor and conversion
thereof. Upon surrender of a Quantum Stock Certificate to Silver Butte for
exchange, together with a duly executed letter of transmittal and such
other documents as may be reasonably required by Silver Butte, the holder
of such Quantum Stock Certificate shall be entitled to receive in exchange
therefor certificates representing the number of whole shares of Silver
Butte Stock that such holder has the right to receive pursuant to the
provisions of this Section 1 and the Quantum Stock Certificate so
surrendered shall be canceled. Until surrendered as contemplated by this
Section 1(f), each Quantum Stock Certificate shall be deemed, from and
after the Effective Time, to represent only the right to receive upon such
surrender a certificate representing shares of Silver Butte Stock as
contemplated by this Section 1. If any Quantum Stock Certificate shall have
been lost, stolen or destroyed, Silver Butte may, in its discretion and as
a condition precedent to the issuance of any certificates representing
Silver Butte Stock, require the owner of such lost, stolen or destroyed
Quantum Stock Certificate to provide an appropriate affidavit and to
deliver a bond (in such sum as Silver Butte may reasonably direct) as
indemnity.
(2) No dividends or other distributions declared or made with respect
to Silver Butte Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Quantum Stock Certificate with
respect to the shares of Quantum Stock represented thereby, and no cash
payment in lieu of any fractional share shall be paid to any such holder,
until such holder surrenders such Quantum Stock Certificate in accordance
with this Section 1(f) (at which time such holder shall be entitled to
receive all such dividends and distributions and such cash payment).
(3) No fractional shares of Silver Butte Stock shall be issued in
connection with the Exchange. In lieu of such fractional shares, any holder
of capital stock of Quantum who would otherwise be entitled to receive a
fraction of a share of Silver Butte Stock shall, upon surrender of such
holder's Quantum Stock Certificate(s), be paid in cash the dollar amount
(rounded to the nearest whole cent), without interest, determined by
multiplying such fraction by the closing price of one share of Silver Butte
Stock as reported by the applicable reporting system on the Closing Date.
(4) Silver Butte shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable to any holder or former
holder of capital stock of Quantum pursuant to this Agreement such amounts
as Silver Butte may be required to deduct or withhold therefrom under the
Internal Revenue Code or under any provision of state, local or foreign tax
law. To the extent such amounts are so deducted or withheld, such amounts
shall be treated for all purposes under this Agreement as having been paid
to the person to whom such amounts would otherwise have been paid.
(g) Notwithstanding anything in this Agreement to the contrary, shares of
capital stock of Quantum that are issued and outstanding immediately prior to
the Effective Time and that are held by stockholders who have not voted such
shares in favor of the Exchange and who have delivered a written notice of their
intent to demand payment for such shares in the manner provided under Idaho Law
("Dissenting Shares") shall not be canceled and converted in accordance with
Section 1(d) unless and until such holder shall have failed to perfect, or shall
have effectively withdrawn or lost, such holder's right to payment under Idaho
Law. If such holder shall have so failed to perfect, or shall have effectively
withdrawn or lost such right, such holder's capital stock of Quantum shall
thereupon be deemed to have been canceled and converted as described in Section
1(d) at the Effective Time, and each such share shall represent solely the right
to receive the Exchange consideration described in Section 1(d). From and after
the Effective Time, no stockholder of Quantum who has demanded appraisal rights
as provided under Idaho Law shall be entitled to vote such holder's shares of
Silver Butte Stock or Quantum Shares for any purpose or to receive payment of
dividends or other distributions with respect to such holder's shares (except
dividends and other distributions payable to stockholders of record of Quantum
at a date which is prior to the Effective Time).
(h) For federal income tax purposes, the Exchange is intended to constitute
a Type "B" reorganization within the meaning of Section 368 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.
(i) For accounting purposes, the Exchange is intended to be treated as a
"purchase."
(j) If, at any time after the Effective Time, any further action is
determined by Silver Butte to be necessary or desirable to carry out the
purposes of this Agreement or to vest Silver Butte with full right, title and
possession of and to all rights and property of Quantum, the officers and
directors of Silver Butte shall be fully authorized (in the name of Quantum and
otherwise) to take such action.
2. Execution Of Agreement Subject To Conditions Precedent To Closing. The
Parties hereto have executed this Agreement as their respective agreement as to
the terms and conditions of the transaction. The execution hereof is expressly
subject to the following conditions precedent, the performance of all of which
shall constitute the Closing, at which time Silver Butte shall deliver by
letter: (i) irrevocable instructions to its Stock Transfer Company to issue the
allotted number of shares of Silver Butte stock to the Quantum Shareholders upon
the tender of appropriate stock certificates of the Quantum Shareholders
representing the shares they own in Quantum, and (ii) the share certificates of
the Quantum Shareholders which shall be tendered thereby. The anticipated
Closing Date has been agreed by the parties to be August 30, 2002, but if the
parties conclude that it cannot be successfully closed by such date, they shall
agree to an extension of Closing of no more than thirty (30) additional days.
Upon the timely completion of all conditions precedent set forth herein, the
parties shall execute a closing certificate so stating and indicating that, all
conditions precedent having been met, the transaction is deemed successfully
closed, and reaffirming the representations and warranties made by such parties
through the Closing Date. The closing certificate shall be binding upon each
company and those shareholders of each company who are signatories to this
agreement. The conditions precedent to closing are as follows:
(a) The exclusive licensing of the Gator Communicator Model IV" hand-held
field digital data mapping device for the United States of America, to
Quantum by the authorized party;
(b) Quantum and Silver Butte have completed their respective due diligence
investigations, the results of which have been reasonably satisfactory
to the respective parties;
(c) The approval of the transaction as described herein by the
shareholders of Quantum and of Silver Butte;
(d) The approval of the transaction as described herein by the Boards of
Directors of Quantum and Silver Butte;
(e) Delivery of all duly endorsed Quantum stock certificates held by the
Quantum Shareholders to counsel for Quantum, to be held in trust until
the Closing date;
(f) The completion, attachment and acceptance by Quantum and Silver Butte,
respectively, of Exhibits "B" through "H" hereto;
(g) The approval by the shareholders of Silver Butte to the amendment of
it Articles of Incorporation or Bylaws or both and the taking of such
action as is necessary to effect the following upon the closing of the
transaction:
(1) The Changing of its corporate name to Quantum Technology Group,
Inc.;
(2) The recapitalization of the corporation to authorize 150,000,000
shares of common stock at one-half cent ($0.005) par value;
(3) The specific abrogation of shareholder preemptive rights;
(4) The abrogation of cumulative voting of shares;
(5) The abrogation of any requirement that a director must be a
shareholder;
(6) The abrogation of any requirement that the president and
vice-president must be directors; and
(7) The resignation of the current directors with effect immediately
upon closing and the election of Xxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxx XX, and Xxxx X.
Xxxxxx as the directors of the corporation with effect
immediately upon closing.
(h) Satisfaction of all applicable requirements of the Securities Act of
1933 and any applicable state securities laws;
(i) Delivery of legal opinions from counsel for Silver Butte and Quantum
reasonably satisfactory to the parties;
(j) Absence of any material adverse effect on Silver Butte or Quantum;
(k) The negotiation of an employment contract with Xxxx X. Xxxxxx whereby
he agrees to serve as President of Silver Butte for at least three (3)
years.
(l) The execution of Consulting Agreements by the current directors of
Silver Butte (Xxxxxx X. Xxxxx, Xxxxxx X. Xxxx, Xxxxx XxXxxxxxxxxx,
Xxxxxx Xxxxxx and Xxxxx Xxxxxx), wherein each shall agree to provide
consulting services in return for the payment to each of them of
250,000 shares of free-trading stock of the corporation (via an S-8
program to be instituted as soon as is practicable after becoming
listed on the OTC:BB), payable in equal monthly installments over the
period of one year. Said agreements shall require the consultants to
consult as needed at the request of the directors of Silver Butte, to
assist, if necessary, with shareholder relations as it relates to now
current shareholders of Silver Butte, and to attend, in person or via
tele-conference, at least one meeting per calendar quarter with the
directors of Silver Butte.
Upon timely and acknowledged completion of the foregoing conditions
precedent, the Stock Transfer Company, pursuant to instructions lodged with it
by Silver Butte shall issue to each Quantum Shareholder, one or more stock
certificates of Silver Butte representing, in the aggregate, the shares of
Silver Butte to which each such shareholder is entitled.
3. Acknowledgment of Restrictions on Shares Transferred to Quantum
Shareholders. The parties hereto acknowledge that the shares being issued by
Silver Butte to the Quantum Shareholders are subject to certain restrictions on
their public sale promulgated by the United States Securities and Exchange
Commission ("SEC") for a period of up to two years (or longer for affiliates).
The shares issued in the Exchange will be issued under an exemption from
registration with the SEC and will be restricted shares as that term is defined
in the Act. Further, these shares cannot be sold or transferred unless the
conditions of Rule 144 of the Securities Act of 1933, as amended (the "Act") are
complied with. This involves certain limitations on the sale of the securities
and certain reporting obligations to be met. A valid opinion of the seller's
counsel will have to be presented to Silver Butte detailing compliance with the
cited rules and an opinion that the shares are free trading in order to provide
for removal of the restrictive legend. A legend will be affixed to each
certificate as follows:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
sold or otherwise transferred unless a compliance with the registration
provisions of such Act has been made or unless availability of an exemption
from such registration provisions has been established, or unless sold
pursuant to Rule 144 under the Securities Act of 1933.
NOTICE TO IDAHO RESIDENTS
The shares are not being registered with the Idaho Department of Finance,
any Idaho corporate agency, or any agency of any other state, and are being
offered under an exemption from registration. For stock issuances subject to
Idaho law, Silver Butte is relying on an exemption under Idaho Code Section
30-1435(1)(n) of Title 30, Chapter 14 of the Securities Act. The following
notification shall apply:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO SECURITIES ACT
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH THE IDAHO
SECURITIES ACT.
4. Resignation Of Board Of Officers And Directors Of Silver Butte And
Appointments. All of the parties hereto agree that it would be in the best
interests of Silver Butte to accept the resignation of its current officers and
directors, contemporaneously with the closing of the transaction. Silver Butte
represents that its board of directors has already so voted and has entered a
resolution that upon closing, the resignations of all of its officers and
directors, which resignations have been tendered and are conditional upon the
closing of this transaction, shall be accepted with immediate effect and that
the last act of such directors prior to resignation shall be the appointment of
Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxx XX,
and Xxxx X. Xxxxxx as the new directors of Silver Butte, as authorized by the
shareholders of Silver Butte. The parties agree that in consideration of their
long and faithful service without appropriate remuneration and their
resignations pursuant to this Agreement, each of the retiring directors shall
receive 750,000 share of restricted stock of Silver Butte as soon after the
effective date of their resignations as it can be instructed and arranged
through the company's share transfer agent.
5. No Prior Transfers by Quantum or Silver Butte. Quantum and Silver Butte
covenant and agree that they have not caused or allowed, since the signing of
the letter of intent between the parties on or about June 4, 2002, the transfer
or encumbrance of any of their assets nor the incurring of additional debt,
except in the ordinary course of Business or as disclosed in Exhibits "B" and
"C", respectively, which shall be attached hereto prior to the Closing Time, nor
shall they do so prior to Closing.
6. Full Disclosure Of All Corporate Assets And Liabilities Of The Parties.
The parties hereto covenant with each other, as a material element of the
bargain, that they have fully disclosed the precise nature and extent of all of
the corporate assets and liabilities of Quantum and Silver Butte, which are
attached hereto as Exhibits "D" and "E", which shall be attached hereto prior to
the Closing Time.
7. Disclosure of Existing Shareholdings of The Parties. The names and share
holdings of all of the current shareholders of Quantum have previously been
disclosed to Silver Butte. Silver Butte has previously disclosed to Quantum the
number of issued and outstanding shares of Silver Butte, but not the names of
the current shareholders, as Silver Butte is a public company whose shareholders
change virtually daily; Silver Butte further covenants that it has not issued
any new shares since the execution of the Letter Of Intent and shall not issue
any new shares prior to the Closing Time, except as expressly authorized herein.
8. Indemnification And Hold Harmless Of Current Silver Butte Directors And
Purchase Of Officers And Directors Liability Insurance. All of the parties
hereto agree that Silver Butte shall hold harmless the resigning directors for
any liability of the combined company resulting from acts or omissions occurring
after such resignations and shall indemnify said resigning directors for any and
all costs, including attorneys' fees, that may be incurred by them arising from
any such claims. In addition, as soon as is practicable after obtaining
sufficient financing so to do, the combined company shall obtain an officers'
and directors' liability insurance policy which is standard for the industry and
which insures both current and former directors from claims made after the
effective date of said policy.
9. Access To Books And Records. The parties agree that up to the closing of
the intended transaction, all parties and their professional advisors shall,
upon reasonable notice, have full access to the premises, property, books and
files of the other corporate parties that may be reasonably required in
connection with the transaction contemplated by this Share Exchange Agreement
and such parties, officers and directors shall supply this information. Any
information shall be treated on a confidential basis and shall not be
disseminated to any third parties without the prior written consent of the other
corporate parties.
10. Representations and Warranties of Silver Butte as to Silver Butte. As a
material inducement to enter into this Agreement and complete the transaction
contemplated by this Agreement and acknowledging that Quantum and the Quantum
Shareholders are entering into this Agreement in reliance upon the
representations and warranties of Silver Butte set out in this Section 10,
Silver Butte represents and warrants to Quantum and the Quantum Shareholders as
follows with regard to Silver Butte:
a. Incorporation and Power. Silver Butte is a corporation incorporated and
validly existing under the laws of the State of Idaho. Silver Butte has
sent to the appropriate authorities all annual returns and financial
statements required to be sent under the laws of the jurisdiction of its
incorporation. Silver Butte has the corporate power and authority and is
qualified to own and dispose of its assets. No act or proceeding has been
taken by or against Silver Butte in connection with the dissolution,
liquidation, winding up, bankruptcy or reorganization of Silver Butte.
b. Due Authorization. Silver Butte has the corporate power, authority and
capacity to enter into this Agreement and all other agreements and
instruments to be executed by it as contemplated by this Agreement and to
carry out its obligations under this Agreement and such other agreements
and instruments. The execution and delivery of this Agreement and such
other agreements and instruments and the completion of the transactions
contemplated by this Agreement and such other agreements and instruments
have been duly authorized by all necessary corporate action on the part of
Silver Butte and the agreement will be offered for ratification by its
shareholders at the meeting of shareholders required by the terms hereof to
be held.
c. Enforceability of Obligations. This Agreement constitutes a valid and
binding obligation of Silver Butte, enforceable against Silver Butte in
accordance with its terms subject, however, to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of the rights of creditors or others and to the extent that
equitable remedies such as specific performance and injunctions are only
available in the discretion of the court from which they are sought. Silver
Butte is not an insolvent person and will not become an insolvent person as
a result of the closing.
d. Title to Assets. Silver Butte has good and marketable title to all of
its assets, free and clear of any and all liens. The assets are sufficient
to permit the continued operation of the business in substantially the same
manner as conducted in the year ended on the date of this Agreement. Other
than this Agreement, there is no agreement, option or other right or
privilege outstanding in favor of any person for the purchase from Silver
Butte of the business or of any of the assets out of the ordinary course of
business.
e. Material Contracts. Silver Butte is not a party to any material contract
except as set forth in Exhibit "F", which shall be attached hereto prior to
the Closing Time.
f. Consents and Approvals. All the consents and approvals necessary for
Silver Butte to execute this Agreement and complete the contemplated
transactions have been obtained, except that of its shareholders, from whom
consent shall be sought before closing. Except for the consents and
approvals, no consent or approval of any Person is required in connection
with the execution and delivery of this Agreement and the completion of the
transactions contemplated by this Agreement or to permit Silver Butte to
carry on the business after the closing as the business is currently
carried on by Silver Butte.
g. Notices. No prior notice is required to be delivered to any person in
connection with the execution and delivery of this Agreement and the
completion of the transaction memorialized by this Agreement other than
appropriate 8K filing and filing with the National Association of
Securities Dealers.
h. Absence of Conflicting Agreements. The execution, delivery and
performance of this Agreement by Silver Butte and the completion (with any
required consents and approvals and notices) of the transaction
memorialized by this Agreement do not and will not result in or constitute
any of the following:
12. Default, breach or violation or an event that, with notice or
lapse of time or both, would be a default, breach or violation of
any of the terms, conditions or provisions of the articles or
by-laws of Silver Butte or of any contract or license or permit;
13. An event which, pursuant to the terms of any contract or license
or permit, causes any right or interest of Silver Butte to come
to an end or be amended in any way that is detrimental to Silver
Butte or entitles any other person to terminate or amend any such
right or interest;
14. The creation or imposition of any lien on any asset; or
15. The violation of any applicable law applicable to or affecting
Silver Butte.
i. Litigation. There is no action, suit, proceeding, claim, application,
complaint or investigation in any court or before any arbitrator or before
or by any regulatory body or governmental or non-governmental body pending
or threatened by or against Silver Butte or the transactions contemplated
by this Agreement; and, there is no factual or legal basis which could give
rise to any such action, suit, proceeding, claim, application, complaint or
investigation.
j. Financial Statements. The financial statements of Silver Butte filed
with the United States Securities And Exchange Commission, and any
additional financial statements provided for dissemination to any of the
parties to this Agreement are true and accurate, to the best knowledge of
Silver Butte and the Silver Butte Participating Shareholders, after due
inquiry and investigation.
k. Brokerage Fees. No brokerage fees are being paid or are obligated to be
paid to any third party as a result of this transaction.
l. Operating and Maintenance History. Silver Butte has provided to Quantum
all existing data regarding the operating and maintenance history of Silver
Butte for the immediately preceding three years.
m. Compliance with Applicable Laws. To the best of its knowledge, Silver
Butte has operated and is operating in compliance with applicable laws.
n. Subsidiaries. Silver Butte has no subsidiaries.
o. Environmental Compliance. To the best of the knowledge of Silver Butte,
after due inquiry and investigation:
1. Silver Butte is in compliance with all Environmental Laws.
"Environmental Laws" shall mean federal or state laws or regulations
relating to pollution, or the protection of human health or the
environment, including, but not limited to, the Clean Air Act, the
Federal Water Pollution Control Act (as amended by the Clean Water Act
of 1977 and the Water Quality Act of 1987), the Resource Conservation
and Recovery Act of 1965 (as amended by the Hazardous and Solid Waste
Amendments of 1984), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (as amended by the Superfund
Amendments and Reauthorization Act of 1986), the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, and the Federal
Insecticide, Fungicide & Rodenticide Act, all as in effect on the
Closing Date or, with respect to the representations and warranties,
in effect on the date hereof. Such compliance includes, but is not
limited to (i) the possession by Silver Butte of all permits and other
governmental authorizations required under all applicable
Environmental Laws and compliance with the terms and conditions
thereof, and (ii) compliance relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Materials. "Hazardous Materials" means any
hazardous or toxic substance regulated or subject to cleanup authority
under any Environmental Laws.
2. Silver Butte has received no notice from any governmental authority or
third party alleging that Silver Butte is not in compliance with
Environmental Laws, and there are no circumstances that may prevent or
interfere with material compliance in the future. Silver Butte has
made available to Quantum all material information that is in the
possession of or reasonably available to Silver Butte regarding
environmental matters pertaining to the environmental conditions of
properties owned or leased by Silver Butte. To the best of the
knowledge of Silver Butte, there have been no releases of any
Hazardous Materials, pollutants, or contaminants on, or from the real
property or leased property of Silver Butte that could subject the
other parties to this Agreement to liability under any Environmental
Laws.
p. SEC Compliance. Silver Butte is current on the filing of all required
forms, reports and documents with the Securities and Exchange Commission
(the "SEC"), each of which has complied in all material respects with all
applicable rules of the Securities Act of 1933, as amended ("the Securities
Act") , and the Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, each as in effect on the dates such
forms, reports and documents were filed and do not contain any untrue
statements of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Furthermore, all securities issuances by Silver Butte have been made in
full compliance with all applicable federal and state securities law.
q. Full Disclosure. None of the foregoing representations and warranties
and no document furnished by or on behalf of Silver Butte to Quantum and
the Quantum Shareholders in connection with the negotiation of the
transactions contemplated by this Agreement contain any untrue statement of
a material fact or omit to state any material fact necessary to make any
such statement or representation not misleading to a prospective purchaser
of the capital stock of Silver Butte seeking full information as to Silver
Butte and its properties, businesses and affairs. Except for those matters
disclosed in this Agreement, there are no facts related to the business not
disclosed in this Agreement which, if learned by the other parties hereto,
might reasonably be expected to materially diminish their evaluation of the
worth or profitability of the Business or which, if learned by the other
parties hereto, might reasonably be expected to deter them from completing
the transactions contemplated by this Agreement on the terms of this
Agreement.
r. Capitalization. The corporation is currently capitalized at 10,000,000
authorized shares of common stock, par value US$0.05, with 8,485,415 shares
of common stock issued and outstanding as of the date of this Agreement,
and the corporation has no stock options, warrants or rights outstanding or
exercisable by any party.
s. Tax Matters. The following terms, as used herein, have the following
meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Post-Closing Tax Period" means any Tax period (or portion thereof) ending
after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
on or before the close of business on the Closing Date.
"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.
(1) Tax Representations and Warranties. Silver Butte represents and
warrants to the other parties to this Agreement that:
(a) Silver Butte has filed all Tax Returns required to be filed and no
Taxes are currently due. All such Tax Returns were complete and correct in
all respects. No portion of any Tax Return that relates to the operation of
Silver Butte has been the subject of any audit, action, suit, proceeding,
claim or examination by any governmental authority, and no such audit,
action, suit, proceeding, claim, deficiency or assessment is pending or, to
the knowledge of Silver Butte, threatened. There are no liens for taxes
upon the assets. Silver Butte does not have, and has not had, a permanent
establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
Silver Butte does not have any liability for the taxes of any person (other
than Silver Butte) under Treasury Regulation Section 1.1502-6 (or any
corresponding provision of state, local or foreign tax law), as a
transferee or successor, by contract, or otherwise. No portion of the
purchase price is subject to any tax withholding provision of federal,
state, local or foreign law.
(b) Silver Butte does not have employees, independent contractors,
creditors or other third parties for whom Taxes are required to be
withheld.
(c) No state of facts exists or has existed that would constitute grounds
for the assessment against Quantum or the Quantum Shareholders, whether by
reason of transferee liability or otherwise, of any liability for any tax
of anyone other than Quantum and the Quantum Shareholders.
(d) Silver Butte has no tax liability for the Pre-Closing Tax Period.
(e) Silver Butte has received no revenue upon which an assessment for taxes
could be based.
(2) Tax Cooperation; Allocation of Taxes.
(a) Any transfer, documentary, sales, use or other tax assessed upon or
with respect to the transfer of the capital stock of Quantum to Silver
Butte and any recording or filing fees with respect thereto shall be the
responsibility of Silver Butte.
(b) Silver Butte and Quantum shall file all required tax returns and shall
not make any inconsistent written statements or take any inconsistent
position on any tax return, in any refund claim, during the course of any
U.S. Internal Revenue Service ("IRS") audit or other tax audit, for any
financial or regulatory purpose, in any litigation or investigation or
otherwise.
11. Representations and Warranties of Quantum and the Quantum Shareholders
As To Quantum. As a material inducement to entering into this Agreement and
completing the transactions contemplated by this Agreement and acknowledging
that Silver Butte is entering into this Agreement in reliance upon the
representations and warranties of Quantum and the Quantum Shareholders set out
in this Section 11, Quantum and the Quantum Shareholders represent and warrant
to Silver Butte as follows with regard to Quantum:
a. Incorporation and Power. Quantum is a corporation incorporated and
validly existing under the laws of the State of Idaho. Quantum has sent to
the appropriate authorities all annual returns and financial statements
required to be sent under the laws of the jurisdiction of its
incorporation. Quantum has the corporate power and authority and is
qualified to own and dispose of its Assets. No act or proceeding has been
taken by or against Quantum in connection with the dissolution,
liquidation, winding up, bankruptcy or reorganization of Quantum.
b. Due Authorization. Quantum has the corporate power, authority and
capacity to enter into this Agreement and all other agreements and
instruments to be executed by it as contemplated by this Agreement and to
carry out its obligations under this Agreement and such other agreements
and instruments. The execution and delivery of this Agreement and such
other agreements and instruments and the completion of the transactions
contemplated by this Agreement and such other agreements and instruments
have been duly authorized by all necessary corporate action on the part of
Quantum and its shareholders.
c. Enforceability of Obligations. This Agreement constitutes a valid and
binding obligation of Quantum, enforceable against Quantum in accordance
with its terms subject, however, to limitations on enforcement imposed by
bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of the rights of creditors or others and to the extent that
equitable remedies such as specific performance and injunctions are only
available in the discretion of the court from which they are sought.
Quantum is not an insolvent person and will not become an insolvent person
as a result of the Closing.
d. Title to Assets. Quantum has good and marketable title to all of its
assets, free and clear of any and all liens, except for the liens set forth
in Exhibit "G" which shall be attached hereto prior to the Closing Time.
The assets are sufficient to permit the continued operation of the business
in substantially the same manner as conducted in the year ended on the date
of this Agreement. Other than this Agreement, there is no agreement, option
or other right or privilege outstanding in favor of any person for the
purchase from Quantum of the business or of any of the assets out of the
ordinary course of business.
e. Material Contracts. Quantum is not a party to any material contracts,
except as set forth in Exhibit "H", which shall be attached hereto prior to
the Closing Time.
f. Consents and Approvals. Except for shareholder approval, all the
consents and approvals necessary for Quantum to execute this Agreement and
complete the contemplated transactions have been obtained. Except for the
consents and approvals set forth herein, no consent or approval of any
person is required in connection with the execution and delivery of this
Agreement and the completion of the transactions contemplated by this
Agreement or to permit Quantum to carry on the business after the closing
as the business is currently carried on by Quantum.
g. Notices. Except for shareholder meeting notice, no prior notice is
required to be delivered to any person in connection with the execution and
delivery of this Agreement and the completion of the transaction
memorialized by this Agreement.
h. Absence of Conflicting Agreements. The execution, delivery and
performance of this Agreement by Quantum and the completion (with any
required consents and approvals and notices) of the transaction
memorialized by this Agreement do not and will not result in or constitute
any of the following:
1. A default, breach or violation or an event that, with notice or lapse
of time or both, would be a default, breach or violation of any of the
terms, conditions or provisions of the articles or bylaws of Quantum
or of any contract or license or permit;
2. An event which, pursuant to the terms of any contract or license or
permit, causes any right or interest of Quantum to come to an end or
be amended in any way that is detrimental to Quantum or entitles any
other person to terminate or amend any such right or interest;
3. The creation or imposition of any lien on any asset; or
4. The violation of any applicable law applicable to or affecting
Quantum.
i. Litigation. There is no action, suit, proceeding, claim, application,
complaint or investigation in any court or before any arbitrator or before
or by any regulatory body or governmental or non-governmental body pending
or threatened by or against Quantum related to Quantum or the transactions
contemplated by this Agreement; and, there is no factual or legal basis
which could give rise to any such action, suit, proceeding, claim,
application, complaint or investigation.
j. Financial Statements. The financial statements of Quantum heretofore
provided to Silver Butte are true and accurate, to the best of the
knowledge of Quantum and the Quantum Shareholders, after due inquiry and
investigation. Quantum being a new corporation, no tax returns have been
filed.
k. Brokerage Fees. No brokerage fees are being paid or are obligated to be
paid to any third party as a result of the transaction.
l. Operating and Maintenance History. Quantum being a newly-formed
corporation, it has not provided to Silver Butte any operating and
maintenance history of Quantum.
m. Compliance with Applicable Laws. To the best of its knowledge, Quantum
has operated and is operating in compliance with applicable laws.
n. Subsidiaries. Quantum has no subsidiaries.
o. Environmental Compliance. To the best of the knowledge of Quantum, after
due inquiry and investigation:
1. Quantum is in compliance with all Environmental Laws. "Environmental
Laws" shall mean federal or state laws or regulations relating to
pollution, or the protection of human health or the environment,
including, but not limited to, the Clean Air Act, the Federal Water
Pollution Control Act (as amended by the Clean Water Act of 1977 and
the Water Quality Act of 1987), the Resource Conservation and Recovery
Act of 1965 (as amended by the Hazardous and Solid Waste Amendments of
1984), the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as amended by the Superfund Amendments and
Reauthorization Act of 1986), the Hazardous Materials Transportation
Act, the Toxic Substances Control Act, and the Federal Insecticide,
Fungicide & Rodenticide Act, all as in effect on the Closing Date or,
with respect to the representations and warranties, in effect on the
date hereof. Such compliance includes, but is not limited to (i) the
possession by Quantum of all permits and other governmental
authorizations required under all applicable Environmental Laws and
compliance with the terms and conditions thereof, and (ii) compliance
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Hazardous Materials.
"Hazardous Materials" means any hazardous or toxic substance regulated
or subject to cleanup authority under any Environmental Laws.
2. Quantum has received no notice from any governmental authority or
third party alleging that Quantum is not in compliance with
Environmental Laws, and there are no circumstances that may prevent or
interfere with material compliance in the future. Quantum has made
available to Silver Butte all material information that is in the
possession of or reasonably available to Quantum regarding
environmental matters pertaining to the environmental conditions of
properties owned or leased by Quantum. To the best of its knowledge,
there have been no releases of any Hazardous Materials, pollutants, or
contaminants on, or from the real property or leased property of
Quantum that could subject the other parties to this Agreement to
liability under any Environmental Laws.
p. Full Disclosure. None of the foregoing representations and warranties
and no document furnished by or on behalf of Quantum to Silver Butte in
connection with the negotiation of the transactions contemplated by this
Agreement contain any untrue statement of a material fact or omit to state
any material fact necessary to make any such statement or representation
not misleading to a prospective purchaser of the capital stock of Quantum
seeking full information as to Quantum and its properties, businesses and
affairs. Except for those matters disclosed in this Agreement, there are no
facts related to the business not disclosed in this Agreement which, if
learned by Silver Butte, might reasonably be expected to materially
diminish its evaluation of the worth or profitability of the business or
which, if learned by Silver Butte, might reasonably be expected to deter
them from completing the transactions contemplated by this Agreement on the
terms of this Agreement.
q. Capitalization. The corporation is currently capitalized at 10,000,000
authorized shares of common stock, no par value, with 1,000,000 shares of
common stock issued and outstanding as of the date of this Agreement, and
the corporation has no stock options, warrants or rights outstanding or
exercisable by any party.
r. Tax Matters. The following terms, as used herein, have the following
meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Post-Closing Tax Period" means any Tax period (or portion thereof) ending
after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
on or before the close of business on the Closing Date.
"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.
(1) Tax Representations and Warranties. Quantum represents and warrants to
the other parties to this Agreement that:
(a) Quantum, being a newly-formed corporation has not yet been required to
and has not yet filed any tax returns. Quantum is not currently the
beneficiary of any extension of time within which to file its tax returns
for the most recent fiscal year, and Quantum has not waived any statute of
limitation with respect to any tax or agreed to any extension of time with
respect to a tax assessment or deficiency. There are no liens for taxes
upon the assets. Quantum does not have, and has not had, a permanent
establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
Quantum does not have any liability for the taxes of any person (other than
Quantum) under Treasury Regulation Section 1.1502-6 (or any corresponding
provision of state, local or foreign tax law), as a transferee or
successor, by contract, or otherwise. No portion of the purchase price is
subject to any tax withholding provision of federal, state, local or
foreign law.
(b) Quantum has no employees, independent contractors, creditors or other
third parties for whom taxes are required to be withheld.
(c) No state of facts exists or has existed that would constitute grounds
for the assessment against Silver Butte, whether by reason of transferee
liability or otherwise, of any liability for any tax of anyone other than
Silver Butte.
(d) Quantum has no tax liability for the Pre-Closing tax period.
(e) Quantum has received no revenue in the current fiscal year upon which
an assessment for taxes could be based.
(2) Tax Cooperation; Allocation of Taxes.
(a) Any transfer, documentary, sales, use or other taxes assessed upon or
with respect to the transfer of the capital stock of Silver Butte to the
Quantum Shareholders and any recording or filing fees with respect thereto
shall be the responsibility of Silver Butte.
(b) Silver Butte and Quantum shall file all required tax returns and shall
not make any inconsistent written statements or take any inconsistent
position on any tax return, in any refund claim, during the course of any
U.S. Internal Revenue Service ("IRS") audit or other tax audit, for any
financial or regulatory purpose, in any litigation or investigation or
otherwise.
12. Representations of Quantum and Each of the Principal Quantum
Shareholders As To The Quantum Shareholders. Quantum and each of the Quantum
Shareholders, individually, represent as a material part of this transaction
that, to the best of Quantum's and such Quantum Shareholder's knowledge and,
where applicable, the knowledge of its officers, directors, agents, attorneys
and solicitors:
(a) Each of the Quantum Shareholders owns the number of shares of the
capital stock of Quantum set forth in Exhibit "A" attached hereto,
which ownership is free and clear of all encumbrances or claims of any
third parties whatsoever.
(b) If any Quantum Shareholder is other than an individual, that it has
full right, power, legal capacity and authority to enter into this
Agreement and the contemplated transaction, and this Agreement shall
constitute a valid and binding obligation of the Quantum Shareholder
enforceable in accordance with the terms hereof.
(c) Such Quantum Shareholder has all necessary legal authority to own its
assets and to carry on its business as now conducted by it, and, if
applicable, it is registered as required and in good standing with
respect to the filing of annual returns under the laws of all
jurisdictions in which its failure to so register would have an
adverse effect on its rights and obligations under this Agreement.
(d) Each Quantum Shareholder has been advised to seek his/her/its own
professional advice regarding the transactions contemplated by this
Agreement and is relying upon his/her/its own counsel regarding this
transaction and not on the counsel of any other party hereto,
including Silver Butte or Quantum.
13. Costs of Transaction. Except where expressly stated otherwise herein,
each party shall bear its own costs and expenses of entering into the
transaction, including, but not limited to, travel, lodging, meals, salaries,
commissions, attorneys' fees, accountants' fees, other professional fees,
regulatory fees, and taxes.
14. Rights Upon Breach of Agreement. The parties hereto agree and
acknowledge that the breach of any portion of this Agreement will cause
irreparable harm and significant injury to the non-breaching party which may be
difficult to ascertain. Accordingly, and in addition to all other remedies
available to the parties in equity and at law, the non-breaching party shall
have the right to obtain injunctive relief, both temporary and permanent,
enjoining any breach of this Agreement. Nothing herein contained is intended to
nor shall it limit or affect any rights at law or by statute or otherwise of any
party aggrieved as against the other parties for a breach or threatened breach
of any provision hereof, it being the intention by this paragraph to make clear
the agreement of the parties that the respective rights and obligations of the
parties hereunder shall be enforceable in equity as well as at law or otherwise.
15. Notices. All notices, consents and demands under this Agreement shall
be in writing and may be delivered personally, sent by telegram, telex, air
courier or facsimile or may be forwarded by first class pre-paid registered or
certified mail to the address for each party set forth above, or to such address
as each party may from time to time specify by notice. Any such notice shall be
deemed to have been given and received on the business day next following the
date of delivery.
16. Grammatical Construction. In this Agreement, whenever the context so
requires, the masculine gender includes the feminine and/or neuter, the singular
number includes the plural, and words importing persons shall include firms or
corporations and vice versa. The terms "$" and "US$" shall mean United States
Dollars.
17. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, all of which together shall constitute one and the same
instrument and when so signed shall be deemed to bear the date first written
above.
18. Choice of Law, Jurisdiction and Venue. This Agreement and any disputes
arising hereunder shall be governed by the laws of the State of Idaho, United
States of America. In the event of any dispute, the parties agree that good
faith efforts shall be made to resolve the dispute through voluntary mediation
or arbitration. In the event of court action in relation to this Agreement,
exclusive original jurisdiction and venue shall lie with the District Court for
the District of Idaho which is responsible for the County of Bonneville, State
of Idaho.
19. Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall for any reason or to any extent, be
invalid or unenforceable, such invalidity or unenforceability shall not in any
manner affect or render invalid or unenforceable the remainder of this
Agreement, and the application of that provision to other persons or
circumstances shall not be affected but, rather, shall be enforced to the extent
permitted by law.
20. Warranty of Authority. The persons executing and delivering this
Agreement on behalf of the parties represent and warrant that each of them is
duly authorized to do so and that the execution of this Agreement is the lawful
and voluntary act of the parties.
21. Assignability. Neither this Agreement, nor any rights or obligations
conferred hereunder, may be assigned in whole or in part by either party without
obtaining the prior written consent of the other party.
22. Time; Waiver Of Breach. It is agreed by the parties that time is of the
essence to this Agreement. The failure of either party to enforce for any time
or for any period of time any of the provisions of this Agreement shall not be
construed as a waiver of such provision or of the right of such party thereafter
to enforce each and every such provision.
23. Force Majeure. In the event that the parties shall be prevented from
performing any of the obligations hereunder by reason of labor disturbances,
shortage of labor or equipment, strikes, lockouts, other industrial
disturbances, inability to obtain transportation, failure of title, act of God,
act of a public enemy, war, blockade, riot, insurrection, disaster, lightning,
fire, storm, flood, inclement weather, explosion, litigation, restraining
orders, injunctions, or orders of courts or government agencies, or any law,
regulations, restrictions, or actions or inactions of governmental agencies, or
on account of any eventuality or condition, whether enumerated or not, beyond
the reasonable control of such party, including state, federal, or local safety
or environmental statutes or regulations, the parties' obligations hereunder
shall xxxxx during the period of such conditions, but only to the extent that
the parties are prevented, by reason of such conditions, from complying with the
requirements set forth in this Agreement within the appropriate times. The
parties agree that the time within which such compliance is required shall
automatically be extended for the length of time during which the condition
prevails.
24. Indemnification. Each party hereto shall defend, indemnify and hold
harmless each and every other party hereto and their employees, agents,
representatives, and advisors from any and all claims, liabilities, judgments,
penalties, losses, costs, damages and expenses (including amounts paid in
settlement, costs of investigation and reasonable attorneys' fees and expenses)
arising out of or relating to:
(a) Any breach of any representation or warranty made in this Agreement or
any related documents by the indemnifying party;
(b) Any breach of any covenant, agreement or undertaking made in this
Agreement or any related documents by the indemnifying party;
(c) Any fraud or willful misconduct by the indemnifying party in connection
with this Agreement or any related documents.
25. Further Assurances. Each of the parties agrees that it shall take from
time to time such actions and execute such additional instruments as may be
reasonably necessary or convenient to implement and carry out the intent and
purpose of this Agreement.
26. Modification of Agreement. It is expressly understood and agreed by and
between the parties hereto that this Agreement may be modified only by a written
instrument, which written instrument must be signed by all of the parties to
this Agreement.
27. Entire Agreement. All of the terms and conditions of this Agreement
between the parties are contained herein, and NO REPRESENTATIONS OR INDUCEMENTS
HAVE BEEN MADE OTHER THAN THOSE SPECIFICALLY SET FORTH, WITH THE SOLE EXCEPTION
OF THE SHARE VOTING AGREEMENT BETWEEN THE PRINCIPAL Quantum SHAREHOLDERS AND THE
Silver Butte PARTICIPATING SHAREHOLDERS AS REFERRED TO HEREIN.
28. Termination.
(a) This Agreement may be terminated:
(1) Prior to the Closing by Silver Butte if (i) there is a
material breach of any covenant or obligation of Quantum or
the Quantum Shareholders or (ii) Silver Butte reasonably
determines that the timely satisfaction of any condition set
forth in Section 2 has become impossible (other than as a
result of any failure on the part of Silver Butte to comply
with or perform any covenant or obligation of Silver Butte
set forth in this Agreement);
(2) Prior to the Closing by Quantum if (i) there is a material
breach of any covenant or obligation of Silver Butte or (ii)
Quantum reasonably determines that the timely satisfaction
of any condition set forth in Section 2 has become
impossible (other than as a result of any failure on the
part of Quantum to comply with or perform any covenant or
obligation of Quantum set forth in this Agreement);
(3) By either Silver Butte or Quantum if the Closing has not
taken place on or before September 30, 2002 (other than as a
result of any failure on the part of such party seeking
termination to comply with or perform any covenant or
obligation of said party set forth in this Agreement);
(4) By the mutual consent of Silver Butte and Quantum.
(b) If Silver Butte wishes to terminate this Agreement pursuant to
Section 28, Silver Butte shall deliver to Quantum a written
notice stating that Silver Butte is terminating this Agreement
and setting forth a brief description of the basis on which
Silver Butte is terminating this Agreement. If Quantum wishes to
terminate this Agreement pursuant to Section 28, Quantum shall
deliver to Silver Butte a written notice terminating this
Agreement and setting forth a brief description of the basis on
which this Agreement is terminated.
(c) If this Agreement is terminated pursuant to Section 28, all
further obligations of the parties under this Agreement shall
automatically terminate; provided, however, that none of the
parties shall be relieved of any obligation or liability arising
from any prior breach by such party of any provision of this
Agreement.
29. Survival of Representations and Warranties. All representations and
warranties made in this Agreement shall survive the Closing of this Agreement,
except that any party to whom a representation or warranty has been made in this
Agreement shall be deemed to have waived any misrepresentation or breach of
representation or warranty of which such party had knowledge prior to Closing.
Any party learning of a misrepresentation or breach of representation or
warranty under this Agreement shall immediately give written notice thereof to
all other parties to this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the parties hereto are deemed to have executed this
instrument the day and year first above written.
QUANTUM TECHNOLOGY GROUP, INC.:
By: /s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx, President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxxx, XX
Xxxxxx X. Xxxxxxxx XX, Secretary
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
THE SHAREHOLDERS OF QUANTUM:
/s/Xxxxx X. Xxxxxxxx /s/Xxxxx X. Xxxxxxxx
-------------------- --------------------
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx
/s/Xxxxxx X. Xxxxxxx /s/Xxxxxxx Xxxxxxx
-------------------- ------------------
Xxxxxx X. Xxxxxxx Xxxxxxx Xxxxxxx
/s/Xxxxxx X. Xxxxxxx /s/Xxxxxxx Xxxxxxx
-------------------- ------------------
Xxxxxx X. Xxxxxxx Xxxxxxx Xxxxxxx
/s/Xxxxxxx X. Xxxxx /s/Xxxx X. Xxxxx
------------------- ----------------
Xxxxxxx X. Xxxxx Xxxx X. Xxxxx
/s/Xxxxxx X. Xxxxxxxx XX /s/Xxxxx Xxxxxxx
------------------------ ----------------
Xxxxxx X. Xxxxxxxx XX Xxxxx Xxxxxxx
/s/Xxxx X. Xxxxxx /s/Xxxxx Xxxxx
----------------- --------------
Xxxx X. Xxxxxx Xxxxx Xxxxx
/s/Xxxxx Xxxxx /s/Xxxxx X. Xx
-------------- --------------
Xxxxx Xxxxx Xxxxx X. Xx
SILVER BUTTE MINING COMPANY:
By: /s/Xxxxx XxXxxxxxxxxx
Xxxxx XxXxxxxxxxxx, President
ATTEST:
By: /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Secretary
EXHIBIT "A" - LIST OF QUANTUM SHAREHOLDERS
page 1
Name And Address Quantum Share Holding Silver Butte Shares Allocated
---------------- --------------------- -----------------------------
Xxxxx X. Xxxxxxxx 70,000 3,500,000
c/o Xxxxx Xxxxx Law Offices
0000 X. Xxxxxxx
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxx X. Xxxxxxxx 50,000 2,500,000
c/o Xxxxx Xxxxx law Offices
0000 X. Xxxxxxx
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxxx X. Xxxxxxx 90,000 4,500,000
P. O. Xxx 000
Xxxxxxxx, XX 00000
SSN:
Xxxxxxx Xxxxxxx 20,000 1,000,000
000 Xxxxxx Xx.
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxxxx X. Xxxxxxx 10,000 500,000
000 Xxxxxx Xx.
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxxx X. Xxxxxxx 120,000 6,000,000
000 X. Xxxxxxxxx Xx.
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxxxx X. Xxxxx & 100,000 5,000,000
Xxxx X. Xxxxx, JTROS
0000 Xxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
SSN: ###-##-####
page 2
Xxxxxx X. Xxxxxxxx XX 100,000 5,000,000
0000 X. 00xx X.
Xxxxx Xxxxx, XX 00000
SSN: ###-##-####
Xxxxx Xxxxxxx 20,000 1,000,000
0000 Xxxxx Xxx. X. #00
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxx X. Xxxxxx 360,000 18,000,000
000 Xxxx 00xx Xx.
Xxxxx Xxxxx, XX 00000
SSN: ###-##-####
Xxxxx Xxxxx 1,000 50,000
0000 Xxxxxxx Xxxxx #0
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxx Xxxxx 19,000 950,000
0000 Xx. Xxxxxx Xx.
Xxxxxxxx, XX 00000
SSN: ###-##-####
Xxxxx X. Xx 40,000 2,000,000
000 Xxxx 00xx Xx.
Xxxxx Xxxxx, XX 00000
SSN: ###-##-####
EXHIBIT "B" -
TRANSFER OR ENCUMBRANCE OF ASSETS OR INCURRING OF ADDITIONAL
DEBT SINCE LETTER OF INTENT BY QUANTUM
None.
EXHIBIT "C"
TRANSFER OR ENCUMBRANCE OF ASSETS OR INCURRING OF ADDITIONAL
DEBT SINCE LETTER OF INTENT BY SILVER BUTTE
There will be a number of debts incurred in the process of moving forward in the
proposed merger between Silver Butte and Quantum, such as attorney's fees,
printing, mailing, audit, and all other expenses incurred as out-of-the-pcoket,
phone bills, vehicle mileage and etc.
It is impossible to set a dollar amount at this time, as we have no good
information to make a statement from.
Silver Butte has and will be making an honest effort to keep all costs
reasonable and prudent.
EXHIBIT "D"
LIST OF ASSETS AND LIABILITIES OF QUANTUM
The only asset of Quantum at the time of closing shall be the License Agreement
for the Gator Communicator Model IV for the territory of the United States of
America.
No liabilities exist as a charge against the assets of Quantum except trade
accounts payable in a sum not exceeding $1,000.00.
EXHIBIT "E"
LIST OF ASSETS AND LIABILITIES OF SILVER BUTTE
See attached Silver Butte Mining Company condensed balance sheet from SEC 10-QSB
for quarter ending 5/31/02
EXHIBIT "F"
LIST OF MATERIAL CONTRACTS OF SILVER BUTTE
Silver Butte has only one ongoing contract at this time.
Columbia Stock Transfer Co. $400-$500 per yr.***
*** The amount of the contract varies depending on the volume of share
processed and the number of shareholders involved.
EXHIBIT "G"
LIST OF LIENS AGAINST ASSETS OF QUANTUM
No liens exist against the assets of Quantum.
EXHIBIT "H"
LIST OF MATERIAL CONTRACTS OF QUANTUM
The only material contract that will be in existence at closing, the existence
of which is a condition of closing, shall be the License Agreement for the Gator
Communicator Model IV for the territory of the United States of America.
