ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
THIS ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION, (hereinafter the
"Agreement") is made and entered into this 18th day of April, 1995 by and
between The Xxxxx Gold Mines, an Idaho corporation (hereinafter "Xxxxx"), CT
Industries, Inc., a Nevada corporation (hereinafter "CTI"), and the shareholders
of CT Industries, Inc. (hereinafter "Shareholders").
RECITALS
WHEREAS, Xxxxx desires to acquire all of the issued and outstanding shares
of CTI capital stock in exchange for 4,000,000 shares of authorized but
previously unissued Xxxxx common stock, par value One Tenth of a Cent ($.001)
per share, and pursuant to the terms and conditions set forth herein;
WHEREAS, the Shareholders of CTI desire to exchange all of their shares of
CTI capital stock for shares of Xxxxx common stock in the respective amounts set
forth herein; and
WHEREAS, the parties hereto desire to reorganize the management and
operations of Xxxxx, to change the corporation name to Xxxxx Industries, Inc.,
and to change the principal place of business of the corporation.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.1 Acquisition and Plan of Reorganization. The parties hereby
agree that Xxxxx shall acquire all of the issued and outstanding shares of M
capital stock, in exchange for four million (4,000,000) shares of authorized but
previously unissued Xxxxx common stock, par value $.001 per share. It is also
agreed to by the parties hereto that by acquiring all of the shares of CTI
capital stock, Xxxxx will acquire all rights, title and interest to certain
identified assets and property presently owned by CTI and specifically described
and set forth in Exhibit 1.1, annexed hereto and by this reference made a part
hereof. Said assets and property may be subject to certain interests, liens
and/or encumbrances which are further described in Exhibit 1.1. The parties
hereto hereby further agree that (i) at the Closing, as hereinafter defined, CTI
shall become a wholly-owned subsidiary of Xxxxx subject to the conditions and
provisions of Section 1.5 hereof; (ii) as promptly as practicable after the
effectiveness of the Closing, Xxxxx'x corporate name shall be changed to Xxxxx
Industries, Inc.; and (iii) as promptly as practicable after the Closing, the
necessary steps shall be taken in order to reflect the relocation of Xxxxx'x
principal place of business to Newark, New Jersey.
SECTION 1.2 Issuance of Shares.
(a) Upon the Closing of this Agreement, Xxxxx shall cause to be issued and
delivered to the Shareholders of CTI or their designees, stock
certificates representing an aggregate of 4,000,000 shares (the "Xxxxx
Shares") of Xxxxx common stock.
(b) The Xxxxx Shares to be issued hereunder shall be authorized but
previously unissued shares of Xxxxx common stock, and shall be issued
to those persons and in the respective amounts set forth in Exhibit
1.2 annexed hereto and by this reference made a part hereof.
(c) It is hereby acknowledged by the parties hereto that pursuant to that
certain Marketing Agreement entered into by and between Xxxxx and CTI
on March 13, 1995, Xxxxx issued to CTI 100,000 shares of authorized
but previously unissued common stock of Xxxxx as consideration for the
Marketing Agreement. It is agreed upon by the parties hereto that the
100,000 shares are to be considered as part of the 4,000,000 shares of
Xxxxx common stock to be issued hereunder and therefore upon the
issuance of the additional 3,900,000 shares of Xxxxx common stock
under the terms of this Agreement, the full consideration of the
4,000,000 shares designated hereunder shall be deemed to have been
satisfied. (d) All Xxxxx Shares to be issued hereunder are deemed
"restricted securities" as defined by Rule 144 of the Securities Act
of 1933, as amended (the "1933 Act"), and the recipients shall
represent that they are acquiring the Xxxxx Shares for investment
purposes only and without the intent to make a further distribution of
the Xxxxx Shares. All Xxxxx Shares to be issued under the terms of
this Agreement shall be issued pursuant to an exemption from the
registration requirements of the 1933 Act, under Section 4(2) of the
1933 Act and the rules and regulations promulgated thereunder.
Certificates representing the Xxxxx Shares to be issued hereunder
shall bear the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered
for sale, sold or otherwise transferred except in compliance with the
registration provisions of such Act or pursuant to an exemption from
such registration provisions, the availability of which is to be
established to the satisfaction of the Company.
SECTION 1.3 Closing.
The closing of this Agreement and the transactions contemplated hereby (the
"Closing") shall take place on the day of ,1995 (the "Closing Date"), at a
time and place to be mutually agreed upon by the parties hereto, and shall
be subject to the provisions of Article X of this Agreement. At the
Closing:
(a) CTI shall deliver to Xxxxx all stock certificates representing
100% of the issued and outstanding shares of CTI capital stock,
duly endorsed, so as to make Xxxxx the sole holder thereof, free
and clear of all claims and encumbrances;
(b) Xxxxx shall deliver to those persons listed in Exhibit 1.2 stock
certificates representing an aggregate of 4,000,000 shares of
Xxxxx common stock and which certificates shall bear a standard
restrictive legend in the form customarily used with restricted
securities and as set forth in Section 1.2(d) above;
(c) Xxxxx shall deliver an Officer's Certificate as described in
Sections 9.1 and 9.2 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth
herein by Xxxxx are true and correct as of, or have been fully
performed and complied with by, the Closing Date; and
(d) CTI shall deliver an Officer's Certificate as described in
Sections 8.1 and 8.2 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth
herein by CTI and Shareholders are true and correct as of, or
have been fully performed and complied with by, the Closing Date;
SECTION 1.4 Xxxxx Special Meeting of Shareholders. In anticipation of this
Agreement and prior to the Closing Date, Xxxxx shall have taken all necessary
and requisite action to call for a Special Meeting of Shareholders to be held on
or before April 18, 1995, in order to transact the following business:
(a) To ratify this Agreement and all transactions contemplated
hereby;
(b) To amend the Articles of Incorporation to change the corporate
name to Xxxxx Industries, Inc., or any other name deemed suitable
by the shareholders attending the meeting;
(c) To accept the resignation of the current directors of the Company
and to nominate and elect a new Board of Directors consisting of
the following three nominees: Xxxxxx Xxxxxxxxxxx, Xx., Xxxxxx
Xxxxx and Xxxxxx Xxxxxxxxxxx III;
(d) To amend the Articles of Incorporation to change the authorized
capitalization of the Company to 50,000,000 shares of common
stock, par value $.001 per share; and
(e) To amend the Articles of Incorporation to change the stated
corporate purpose to permit the corporation to engage in any
lawful act or activity for which a corporation may be organized
under the Idaho Business Corporation Act.
SECTION 1.5 Consummation of Transaction. If at the Closing, no condition
exists which would permit any of the parties to terminate this Agreement, or a
condition then exists and the party entitled to terminate because of that
condition elects not to do so, then the transactions herein contemplated shall
be consummated upon such date, and then and thereupon, Xxxxx shall file any
additional necessary documents that may be required by the State of Idaho.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx hereby represents, warrants and agrees that:
SECTION 2.1 Organization of Xxxxx. Xxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Idaho, is
duly qualified and in good standing as a foreign corporation in every
jurisdiction in which such qualification is necessary, and has the corporate
power and authority to own its properties and assets and to transact the
business in which it is engaged. There are no corporations or other entities
with respect to which (i) Xxxxx owns any of the outstanding stock or other
interest, or (ii) Xxxxx may be deemed to be in control because of factors or
relationships other that the quantity of stock or other interest owned. Xxxxx
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
is the legal, valid and binding obligation of Xxxxx, enforceable against Xxxxx
in accordance with its respective terms except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally. SECTION 2.2 Capitalization
of Xxxxx. The authorized capital stock of Xxxxx consists of 10,000,000 shares of
common stock, par value $.50 per share, of which 1,029,929 shares are presently
issued and outstanding. All shares of Xxxxx common stock currently issued and
outstanding have been duly authorized and validly issued and are fully paid and
non-assessable, and have been issued in compliance with applicable federal and
state laws or pursuant to appropriate exemptions therefrom. There are no
options, warrants, rights, calls, commitments or agreements of any character
obligating Xxxxx to issue any shares of its capital stock or any security
representing the right to purchase or otherwise receive any such stock. Shares
of Xxxxx common stock to be issued pursuant to this Agreement, when so issued,
will be duly authorized, validly issued, fully paid and non-assessable.
SECTION 2.3 Charter Documents. Certified copies of the Xxxxx Articles of
Incorporation and By-Laws, as amended to date, are annexed hereto as Exhibit 2.3
and by this reference made a part hereof.
SECTION 2.4 Corporate Documents. The Xxxxx shareholders' list and corporate
minute books are complete and accurate as of the date hereof and the corporate
minute books contain the recorded minutes of all corporate meetings of
shareholders and directors.
SECTION 2.5 Financial Statements. Xxxxx'x financial statements for the
period ended March 31, 1995 and the fiscal years ended December 31, 1994 and
1993, a copy of which is annexed hereto as Exhibit 2.5 and by this reference
made a part hereof, are true and complete in all material respects, having been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis for the periods covered by such statements, and fairly
present, in accordance with generally accepted accounting principles, the
financial condition of Xxxxx, and results of its operations for the periods
covered thereby. Except as otherwise disclosed to CTI in writing and as set
forth herein, there has been no material adverse change in the business
operations, assets, properties, prospects or condition (financial or otherwise)
of Xxxxx taken as a whole from that reflected in the financial statements
referred to in this Section 2.5.
SECTION 2.6 Absence of Certain Changes or Events. Since the date of the
Xxxxx financial report attached hereto as Exhibit 2.5 and except as disclosed
otherwise herein, Xxxxx has not (i) issued or sold any promissory note, stock,
bond, option or other corporate security of which it was an issuer or other
obligor, (ii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability, absolute or contingent, direct of indirect, (iii)
incurred or suffered to be incurred any liability or obligation whatsoever, (iv)
caused or permitted any lien, encumbrance or security interest to be created or
arise on or in any of its properties or assets, (v) declared or made any
dividend, payment or distribution to stock holders or purchased or redeemed or
agreed to purchase or redeem any shares of its capital stock, (vi) reclassified
its shares of capital stock, or (vii) entered into any agreement or transaction
except in connection with the execution and performance of this Agreement.
SECTION 2.7 Assets and Liabilities. Xxxxx does not have any material assets
as reflected in the financial statements included as Exhibit 2.5. As of the date
hereof, Xxxxx does not have any debts, liabilities or obligations of any nature,
whether accrued, absolute, contingent, or otherwise, whether due or to become
due, that are not fully reflected in the Xxxxx financial statements.
SECTION 2.8 Tax Returns and Payments. Xxxxx has filed with the appropriate
governmental authority tax returns, whether based upon income, sales or
franchise, as required by law to be filed on or before the date of this
Agreement with the exception of its federal corporate tax returns. Xxxxx
represents that immediately upon the Closing it will prepare and file those
required federal tax returns that may be due. Xxxxx has paid all taxes to be due
on said returns, any assessments made against Xxxxx and all other taxes, fees
and similar charges imposed on Xxxxx by any governmental authority. No tax liens
have been filed and no claims are being assessed and no returns are under audit
with respect to any such taxes, fees or other similar charges.
SECTION 2.9 Contracts. Xxxxx is not a party to or bound by any contract or
commitment, including guaranty whether written or oral, except as otherwise
disclosed in Exhibit 2.9.
SECTION 2.10 Required Authorizations. There have been or will be timely
filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Xxxxx or the
consummation by it of the transactions contemplated hereby. Prior to the
Closing, the shareholders of Xxxxx shall have approved this Agreement and the
transactions contemplated hereunder and the appropriate corporate filings shall
have been made with the State of Idaho.
SECTION 2.11 Compliance with Law and Government Regulations. Xxxxx is in
compliance with and is not in violation of, applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Xxxxx is not subject to any order,
decree, judgment or other sanction of any court, administrative agency or other
tribunal.
SECTION 2.12 Litigation. There is no litigation, arbitration, proceeding or
investigation pending or threatened to which Xxxxx is a party or which may
result in any material change in the business or condition, financial or
otherwise, of Xxxxx or in any of its properties or assets, or which might result
in any liability on the part of Xxxxx, or which questions the validity of this
Agreement or of any action taken or to be taken pursuant to or in connection
with the provisions of this Agreement, and to the best knowledge of Xxxxx, there
is no basis for any such litigation, arbitration, proceeding or investigation.
SECTION 2.13 Trade Names and Rights. Xxxxx does not use any trade xxxx,
service xxxx, trade name, or copyright in its business, nor does it own any
trade marks, trade xxxx registrations or application, trade name, service marks,
copyrights, copyright registrations or application. No person owns any trade
xxxx, trade xxxx registration or application, service xxxx, trade name,
copyright, or copyright registration or application, the use of which is
necessary or contemplated in connection with the operation of Xxxxx'x business.
SECTION 2.14 Governmental Consent. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of Xxxxx is required in connection
with the execution and delivery of this Agreement or the carrying out of any
transactions contemplated hereby with the exception of the necessary corporate
filings with the State of Idaho relating to the amendment of the Articles of
Incorporation and the proposed exchange of shares.
SECTION 2.15 Authority. Xxxxx and its shareholders will, prior to the
Closing, approve this Agreement and the transactions contemplated hereby and
will duly authorize the execution and delivery hereof. Xxxxx has full power,
authority and legal right to enter into this Agreement and to consummate the
transactions contemplated hereby, and all corporate action necessary to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby has been duly and validly taken. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance by Xxxxx with the provisions hereof will not
(a) conflict with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of Xxxxx
under, any of the terms, conditions or provisions of the Articles of
Incorporation or By-Laws of Xxxxx, or any note, bond, mortgage, indenture,
license, lease, agreement or any instrument or obligation to which Xxxxx is a
party or by which it is bound; or (b) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Xxxxx or any of its properties
or assets.
SECTION 2.16 Full Disclosure. None of the representations and warranties
made by Xxxxx herein, or in any exhibit, certificate or memorandum furnished or
to be furnished by Xxxxx, on its behalf pursuant hereto, contains or will
contain any untrue statement of material fact, or omits any material fact, the
omission of which would be misleading.
ARTICLE III
COVENANTS OF XXXXX
SECTION 3.1 Conduct Prior to the Closing. Between the date hereof and the
Closing:
(a) Xxxxx will not enter into any material agreement, contract or
commitment, whether written or oral, or engage in any
transaction, without the prior written consent of CTI;
(b) Xxxxx will not declare any dividends or distributions with
respect to its capital stock or amend its Articles of
Incorporation or By-Laws, without the prior written consent of
CTI;
(c) Xxxxx will not authorize, issue, sell, purchase or redeem any
shares of its capital stock or any options or other rights to
acquire its capital stock, without the prior written consent of
CTI;
(d) Xxxxx will comply with all requirements which federal or state
law may impose on it with respect to this Agreement and the
transactions contemplated hereby, and will promptly cooperate
with and furnish written information to CTI in connection with
any such requirements imposed upon the parties hereto in
connection therewith;
(e) Xxxxx will not incur any indebtedness for money borrowed, or
issue or sell any debt securities, incur or suffer to be incurred
any liability or obligation of any nature whatsoever, or cause or
permit any lien, encumbrance or security interest to be created
or arise on or in any of its properties or assets, acquire or
dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any
third party, settle or discharge any balance sheet receivable for
less than its stated amount or enter into any other transaction
other than in the regular course of business, except to comply
with the terms of this Agreement, without the prior written
consent of CTI;
(f) Xxxxx shall grant to CTI and its counsel, accountants and other
representatives, full access during normal business hours during
the period prior to the Closing to all its respective properties,
books, contracts, commitments and records and, during such
period, furnish promptly to CTI and such representatives all
information relating to Xxxxx as CTI may reasonably request, and
shall extend to CTI the opportunity to meet with Xxxxx'x
accountants and attorneys to discuss the financial condition of
Xxxxx; and
(g) Except for the transactions contemplated by this Agreement, Xxxxx
will conduct its business in the normal course, and shall not
sell, pledge or assign any of its assets without the prior
written consent of CTI.
SECTION 3.2 Affirmative Covenants. Prior to Closing, Xxxxx will do the
following.
(a) Use its best efforts to accomplish all actions necessary to
consummate this Agreement, including satisfaction of all the
conditions contained in this Agreement;
(b) Promptly notify CTI in writing of any material adverse change in
the financial condition, business, operations or key personnel of
Xxxxx, any threatened material litigation or investigation, any
breach of its representations or warranties contained herein, and
any material contract, agreement, license or other agreement
which, if in effect on the date of this Agreement, should have
been included in this Agreement or in an exhibit annexed hereto
and made a part hereof;
(c) Obtain approval of this Agreement from its shareholders;
(d) Nominate at the Xxxxx Special Meeting of Shareholders a new Board
of Directors, nominees to be Xxxxxx Xxxxxxxxxxx, Xx., Xxxxxx
Xxxxx and Xxxxxx Xxxxxxxxxxx III;
(e) Reserve, and promptly after the Closing, issue and deliver to
Shareholders or their designees the number of shares of Xxxxx
common stock required hereunder;
(f) Take the necessary corporate action to amend its Articles of
Incorporation to change its name to Xxxxx Industries, Inc. or any
other name deemed suitable and approved by the shareholders; and
(g) Take all other necessary corporate actions to accomplish those
items set forth in Section 1.4 hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CTI AND SHAREHOLDERS
CTI and Shareholders hereby represent, warrant and agree that:
SECTION 4.1 Organization of CTI. CTI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
is duly qualified and in good standing in every jurisdiction in which such
qualification is necessary. There are no corporations or other entities with
respect to which (i) CTI owns any of the outstanding stock or other interest, or
(ii) CTI may be deemed to be in control because of factors or relationships
other than the percentage of outstanding stock or other interest owned in such
entity except as otherwise disclosed in Exhibit 4.1 annexed hereto and by this
reference made a part hereof. CTI has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
SECTION 4.2 Charter Documents. Complete and correct copies of the Articles
of Incorporation and By-Laws of CTI and all amendments thereto, have been or
will be delivered to Xxxxx prior to the Closing.
SECTION 4.3 Financial Statements / Assets and Liabilities. CTI's financial
statements for the period ended December 31, 1994, a copy of which is annexed
hereto as Exhibit 4.3 and by this reference made a part hereof; are true and
complete in all material respects, having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for the
periods covered by such statements, and fairly present the financial condition
of CTI and results of its operations for the periods covered thereby. CTI has
good and marketable title to all of its assets and property to be delivered to
Xxxxx hereunder (by way of tendering all of its outstanding shares of common
stock to Xxxxx), free and clear of any and all liens, claims and encumbrances,
except as may be otherwise set forth herein and in its financial statements or
as otherwise set forth in Exhibit 1.1.
SECTION 4.4 Tax Returns and Payments. All of CTI's tax returns (federal,
state, city, county or foreign) which are required by law to be filed on or
before the date of this Agreement, have been duly filed or extended with the
appropriate governmental authority. CTI has paid all taxes to be due on said
returns, any assessments made against CTI and all other taxes, fees and similar
charges imposed on CTI by any governmental authority (other than those, the
amount or validity of which is being contested in good faith by appropriate
proceedings). No tax liens have been filed and no claims are being assessed with
respect to any such taxes, fees or other similar charges.
SECTION 4.5 Required Authorizations. There have been or will be timely
filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by CTI or the
consummation by it of the transactions contemplated hereby.
SECTION 4.6 Compliance with Law and Government Regulations. CTI is in
compliance with all applicable statutes, regulations, decrees, orders,
restrictions, guidelines and standards affecting its properties and operations,
imposed by the United States of America or any state to which CTI is subject.
SECTION 4.7 Litigation. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which it is a party or
which may result in any material change in the business or condition, financial
or otherwise, of CTI or in any of its properties or assets, or which if
determined against CTI would have a material adverse effect against CTI, or
which might result in any liability on the part of CTI, or which questions the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement, and to the best knowledge
of CTI, there is no basis for any such litigation, arbitration, proceeding or
investigation.
SECTION 4.8 Patents, Trade Names and Rights Exhibit 4.8 annexed hereto and
by this reference made a part hereof, contains a complete list of all patents,
trademarks, service marks, trademark and service xxxx registrations,
applications and licenses with respect to the foregoing owned or held by M. CTI
has no knowledge of any facts and nothing has come to its attention that would
lead it to believe that it has infringed or misappropriated or is infringing
upon any trademark, copyright, patent or other similar right of any person. No
claim relating thereto is pending or to the knowledge of CTI is threatened.
SECTION 4.9 Governmental Consent. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of CTI is required in connection
with the execution and delivery of this Agreement or the carrying out of any
transactions contemplated hereby.
SECTION 4.10 Authority . CTI and its Shareholders representing no less than
one hundred percent (100%) of the issued and outstanding shares of CTI capital
stock of record, have approved this Agreement and duly authorized the execution
and delivery hereof. CTI has full power, authority and legal right to enter into
this Agreement on behalf of CTI and its Shareholders and to consummate the
transactions contemplated hereby, and all corporate action necessary to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby has been duly and validly taken. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance by CTI with the provisions hereof will not
(a) conflict with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of CTI
under, any of the terms, conditions or provisions of the Articles of
Incorporation or By-Laws of CTI, or any note, bond, mortgage, indenture,
license, agreement or any instrument or obligation to which CTI is party or by
which it is bound; or (b) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to CTI or any of its properties or assets.
SECTION 4.11 Ownership of Shares. Shareholders representing 100% of the CTI
capital stock currently issued and outstanding and which stock is to be
transferred to Xxxxx under this Agreement, have full power and authority to
transfer such shares of CTI capital stock to Xxxxx hereunder, and such shares
are free and clear of any liens, charges, mortgages, pledges or encumbrances and
such shares are not subject to any claims as to the ownership thereof or any
rights, powers or interest therein, by any third party.
SECTION 4.12 Investment Purpose . CTI and Shareholders represent that the
recipients of the Xxxxx Shares hereunder are acquiring the shares for investment
purposes only and acknowledges that the Auger Shares issued hereunder are
"restricted securities" and may not be sold, traded or otherwise transferred
without registration under the 1933 Act or exemption therefrom.
SECTION 4.13 Full Disclosure. None of the representations and warranties
made by CTI and Shareholders herein, or in any exhibit, certificate or
memorandum furnished or to be furnished by Xxxxx, on its behalf contains or will
contain any untrue statement of material fact, or omit any material fact, the
omission of which would be misleading.
ARTICLE V
COVENANTS OF CTI
SECTION 5.1 Conduct Prior to the Closing. Between the date hereof and the
Closing:
(a) Except within the regular course of business, CTI will not enter into
any material agreement, contract or commitment, whether written or
oral, or engage in any transaction, without the consent of Xxxxx;
(b) CTI will not declare any dividends or distributions with respect to
its capital stock or amend its Articles of Incorporation or By-Laws,
without the prior consent of Xxxxx;
(c) Except within the regular course of business, CTI will not incur any
indebtedness for money borrowed or issue any debt securities, or incur
or suffer to be incurred any liability or obligation of any nature
whatsoever, or cause or permit any lien, encumbrance or security
interest to be created or arise on or in any of its properties or
assets, without the consent of Xxxxx;
(d) CTI will comply with all requirements which federal or state law may
impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly cooperate with and furnish
information to Xxxxx in connection with any such requirements imposed
upon the parties hereto in connection therewith; and
(e) CTI shall grant to Xxxxx and its counsel, accountants and other
representatives, full access during normal business hours during the
period prior to the Closing to all its respective properties, books,
contracts, commitments and records and, during such period, furnish
promptly to Xxxxx and such representatives all information relating to
CTI as Xxxxx may reasonably request, and shall extend to Xxxxx the
opportunity to meet with CTI's accountants and attorneys to discuss
the financial condition of CTI.
SECTION 5.2 Affirmative Covenants. Prior to Closing, CTI will do the
following.
(a) Obtain the approval of its Board of Directors and Shareholders to
proceed with this Agreement;
(b) Use its best efforts to accomplish all actions necessary to consummate
this Agreement, including satisfaction of all the conditions contained
in this Agreement; and
(c) Promptly notify Xxxxx in writing of any materially adverse change in
the financial condition, business, operations or key personnel of CTI,
any breach of its representations or warranties contained herein, and
any material contract, agreement, license or other agreement which, if
in effect on the date of this Agreement, should have been included in
this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Expenses. Whether or not the transactions contemplated in this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense or as otherwise agreed to herein.
SECTION 6.2 Brokers and Finders. Each of the parties hereto represents, as
to itself, that no agent, broker, investment banker or firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement.
SECTION 6.3 Necessary Actions. Subject to the terms and conditions herein
provided, each of the parties hereto agree to use all reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers
and/or directors of Xxxxx or CTI, as the case may be, shall take all such
necessary action.
SECTION 6.4 Indemnification.
(a) CTI and Shareholders agree to defend and hold Auger harmless against
and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties, and reasonable attorney
fees, that Xxxxx shall incur or suffer, which arise out of, result
from or relate to any material breach of, or failure by CTI and/or
Shareholders to perform any of its representations, warranties,
covenants and agreements in this Agreement or in any exhibit or other
instrument furnished or to be furnished by CTI and Shareholders under
this Agreement.
(b) Xxxxx agrees to defend and hold CTI and Shareholders harmless against
and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties, and reasonable attorney
fees, that CTI and/or Shareholders shall incur or suffer, which arise
out of, result from or relate to any material breach of, or failure by
Xxxxx to perform any of its representations, warranties, covenants and
agreements in this Agreement or in any exhibit or other instrument
furnished or to be furnished by Xxxxx under this Agreement.
SECTION 6.5 Confidentiality. All parties hereto agree to keep confidential
this Agreement and all information and documents relating to this Agreement
until such time as the Agreement and the transactions contemplated hereunder are
made public by means of an appropriate press release or by any other means
reasonably assured to make such information publicly available.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF TIE PARTIES
The obligations of the parties under this Agreement are subject to the
fulfillment and satisfaction of each of the following conditions:
SECTION 7.1 Legal Action. No preliminary or permanent injunction or other
order by any federal or state court which prevents the consummation of this
Agreement or any of the transactions contemplated by this Agreement shall have
been issued and remain in effect.
SECTION 7.2 Absence of Termination. The obligations to consummate the
transactions contemplated hereby shall not have been canceled pursuant to
Article X hereof.
SECTION 7.3 Required Approvals. Auger and CTI shall have received all such
approvals, consents, authorizations or modifications as may be required to
permit the performance by Xxxxx and C77 of the respective obligations under this
Agreement, and the consummation of the transactions herein contemplated, whether
from governmental authorities or other persons, and Xxxxx and CTI shall each
have received any and all permits and approvals from any regulatory authority
having jurisdiction required for the lawful consummation of this Agreement.
SECTION 7.4 Blue Sky Compliance. There shall have been obtained any and all
permits, approvals and consents of the Securities or "Blue Sky" Commissions of
any jurisdictions, and of any other governmental body or agency, which counsel
for Xxxxx may reasonably deem necessary or appropriate so that consummation of
the transactions contemplated by this Agreement may be in compliance with all
applicable laws.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXX
All obligations of Xxxxx under this Agreement are subject to the
fulfillment and satisfaction by CTI and Shareholders prior to or at the time of
the Closing, of each of the following conditions, any one or more of which may
be waived by Xxxxx.
SECTION 8.1 Representations and Warranties True at the Closing. All
representations and warranties of CTI and Shareholders contained in this
Agreement will be true and correct at and as of the time of the Closing, and CTI
and Shareholders shall have delivered to Xxxxx certificates, dated the date of
the Closing, to such effect and in the form and substance satisfactory to Xxxxx,
and signed, in the case of CTI, by its president and secretary.
SECTION 8.2 Performance. The obligations of CTI and Shareholders to be
performed on or before the Closing pursuant to the terms of this Agreement shall
have been duly performed at such time, and CTI and Shareholders shall have
delivered to Xxxxx a certificate, dated the date of the Closing, to such effect
and in form and substance satisfactory to Xxxxx.
SECTION 8.3 Authority. All action required to be taken by, or on the part
of CTI and its Shareholders to authorize the execution, delivery and performance
of this Agreement by CTI and Shareholders and the consummation of the
transactions contemplated hereby, shall have been duly and validly taken.
SECTION 8.4 Absence of Certain Changes or Events. There shall not have
occurred, since the date hereof' any adverse change in the business, condition,
(financial or otherwise), assets or liabilities of CTI or any event or condition
of any character adversely affecting CTI, and it shall have delivered to Xxxxx,
certificates, dated the date of the Closing, to such effect and in form and
substance satisfactory to Xxxxx and signed, in the case of CTI, by its president
and secretary.
SECTION 8.5 Acceptance by CTI Shareholders. The holders of record as of the
Closing of an aggregate of not less than one hundred percent (100%) of the
issued and outstanding shares of capital stock of CTI have agreed to exchange
their shares for the Xxxxx Shares specified herein.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF CTI
All obligations of CTI and Shareholders under this Agreement are subject to
the fulfillment and satisfaction by Xxxxx, prior to or at the time of Closing,
of each of the following conditions, any one or more of which may be waived by
CTI and Shareholders.
SECTION 9.1 Representations and Warranties True at the Closing. All
representations and warranties of Xxxxx contained in this Agreement will be true
and correct at and as of the time of the Closing, and Xxxxx shall have delivered
to CTI a certificate, dated the date of the Closing, to such effect and in the
form and substance satisfactory to CTI and Shareholders, and signed, in the case
of Xxxxx, by its president and secretary.
SECTION 9.2 Performance. Each of the obligations of Xxxxx to be performed
on or before the Closing pursuant to the terms of this Agreement shall have been
duly performed at the time of the Closing, and Xxxxx shall have delivered to CTI
a certificate, dated the date of the Closing, to such effect and in form and
substance satisfactory to CTI and Shareholders, and signed, in the case of
Xxxxx, by its president and secretary.
SECTION 9.3 Authority. All action required to be taken by, or on the part
of Xxxxx, to authorize the execution, delivery and performance of this Agreement
by Xxxxx, and the consummation of the transactions contemplated hereby shall be
duly and validly taken.
SECTION 9.4 Absence of Certain Chances or Events. There shall not have
occurred, since the date hereof, any adverse change in the business, condition,
(financial or otherwise), assets or liabilities of Xxxxx or any event or
condition of any character adversely affecting Xxxxx and it shall have delivered
to CTI, certificates, dated the date of the Closing, to such effect and in form
and substance satisfactory to CTI and Shareholders and signed, in the case of
Xxxxx, by its president and secretary.
SECTION 9.5 Action by Xxxxx Shareholders. Prior to the Closing of this
Agreement, the shareholders of Xxxxx shall have approved this Agreement and the
transactions contemplated hereunder, approved the amendments to the Xxxxx
Articles of Incorporation as set forth in Section 1.4 above, and shall have
elected new directors as specified in Section 1.4(d) above. The current
directors and officers of Xxxxx shall have submitted their resignations as
directors and officers of Xxxxx effective on the Closing of this Agreement.
ARTICLE X
TERMINATION
SECTION 10.1 Termination. Notwithstanding anything herein or elsewhere to
the contrary, this Agreement may be terminated:
(a) By mutual agreement of all the parties hereto at any time;
(b) By the board of directors of Xxxxx at any time prior to the Closing if
(i) a condition to performance by Xxxxx under this Agreement or a
covenant of CTI and/or Shareholders contained herein shall not be
fulfilled on or before the time of the Closing or at such other
time and date specified for the fulfillment for such covenant or
condition; or
(ii) a material default or breach of this Agreement shall be made by
CTI; or
(iii) if the Closing shall not have taken place on or prior to May 31,
1995.
(c) By the board of directors of CTI at any time prior to the Closing if
(i) a condition to CTI's and Shareholders' performance under this
Agreement or a covenant of Xxxxx contained in this Agreement
shall not be fulfilled on or before the Closing or at such other
time and date specified for the fulfillment of such covenant or
conditions;
(ii) a material default or breach of this Agreement shall be made by
Auger; or
(iii) if the Closing shall not have taken place on or prior to May 31,
1995.
SECTION 10.2 Effect of Termination. If this
Agreement is terminated, this Agreement, except as to Section 11.1 and Section
11.2, shall no longer be of any force or effect and there shall be no liability
on the part of any party or its respective directors, officers or stockholders;
provided however, that in the case of a Termination without cause by a party or
a termination pursuant to Sections 10.1(b)(i) or 10.1(c)(i) hereof because of a
prior material default under or a material breach of this Agreement by another
party, the damages which the aggrieved party or parties may recover from the
defaulting party or parties shall in no event exceed the amount of out-of-pocket
costs and expenses incurred by such aggravated party or parties in connection
with this Agreement, and no party to this Agreement shall be entitled to any
injunctive relief.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Cost and Expenses. All costs and expenses incurred in
connection with this Agreement will be paid by the party incurring such
expenses. In the event of any termination of this Agreement pursuant to Section
10.1, subject to the provisions of Section 10.2, Xxxxx and CTI will each bear
their own respective expenses.
SECTION 11.2 Extension of Time: Waivers. At any time prior to the Closing
date:
(a) Xxxxx may (i) extend the time for the performance of any of the
obligations or other acts of CTI and/or Shareholders, (ii) waive
any inaccuracies in the representations and warranties of CTI and
Shareholders contained herein or in any document delivered
pursuant hereto by CTI and Shareholders, and (iii) waive
compliance with any of the agreements or conditions contained
herein to be performed by CTI and Shareholders. Any agreement on
the part of Xxxxx to any such extension or waiver shall be valid
only if set forth in an instrument, in writing, signed on behalf
of Xxxxx;
(b) CTI may (i) extend the time for the performance of any of the
obligations or other acts of Xxxxx, (ii) waive any inaccuracies
in the representations and warranties of Xxxxx contained herein
or in any document delivered pursuant hereto by Xxxxx and (iii)
waive compliance with any of the agreements or conditions
contained herein to be performed by Xxxxx. Any agreement on the
part of CTI and to any such extension or waiver shall be valid
only if set forth in an instrument, in writing, signed on behalf
of CTI.
SECTION 11.3 Notices. Any notice to any party hereto pursuant to this
Agreement shall be in writing and given by Certified or Registered Mail or by
facsimile, addressed as follows:
The Auger Gold Mines
c/o Xxxxxxx X. Xxxxxxx
Attorney at Law
1121 East 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
CT Industries, Inc.
X.X. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000-0000
Additional notices are to be given as to each party, at such other address
as should be designated in writing complying as to delivery with the terms of
this Section 11.3. All such notices shall be effective when sent, addressed as
aforesaid.
SECTION 11.4 Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and the respective successors and
assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 11.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement shall be deemed to be an original and shall have the full force
and effect of an original executed copy.
SECTION 11.6 Severability. The parties hereto agree and affirm that none of
the provisions herein is dependent upon the validity of any other provision, and
if any part of this Agreement is deemed to be unenforceable, the remainder of
the Agreement shall remain in full force and effect.
SECTION 11.7 Headings. The Article and Section headings are provided herein
for convenience of reference only and do not constitute a part of this
Agreement.
SECTION 11.8 Governing Law. This Agreement shall be governed by the laws of
the State of Utah.
SECTION 11.9 Survival of Representations and Warranties. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, shall
survive the Closing and the delivery of the Xxxxx Shares issued hereunder at the
Closing, for a period of one year from the Closing regardless of any
investigation made by or on behalf of any of the parties hereto.
SECTION 11.10 Assignability. This Agreement shall not be assignable by any
of the parties hereto without the prior written consent of the other parties.
SECTION 11.11 Amendment. This Agreement may be amended with the approval of
Shareholders and the boards of directors of Xxxxx and C77 at any time before or
after approval thereof by stockholders of Xxxxx, if required, and CTI; but after
such approval by the Xxxxx shareholders, no amendment shall be made which
substantially and adversely changes the terms hereof. This Agreement may not be
amended except by an instrument, in writing, signed on behalf of each of the
parties 'hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
"Xxxxx"
THE XXXXX GOLD MINES Attest:
By:
Its: President Secretary
"CTI"
CT INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx /s/ Xxxxxx Xxxxx
President Secretary
"Shareholders"
/s/ Xxxxxx Xxxxxxxxxxx
XXXXXX XXXXXXXXXXX, XX.
/s/ Xxxxxx Xxxxx
XXXXXX XXXXX
