SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") is executed on July 25, 2005, coming
into force on August 1, 2005, by Global Gold Mining, LLC, a Delaware, USA
limited liability company ("Buyer"), Xx. Xxxxxxx Xxxxxxxxxxx, an individual
resident in Armenia ("A"), and Xx. Xxxxxx Xxxxxxxxx, an individual resident in
Armenia ("B"and, collectively with A consisting of one hundred percent of the
"participants" of Mego Gold, LLC an Armenian limited liability company,
"Sellers").
RECITALS
Sellers desire to sell, and Buyer desires to purchase, all of the issued and
outstanding shares of participation (the "Shares") in Mego Gold, LLC an Armenian
limited liability company which holds valid exploration licenses, a pilot plant,
and other assets and improvements in Armenia for the mining property known as
Toukhmanuk and other license areas all as described in the Disclosure Letter
attached and by the Closing shall have mutually acceptable special mining
licenses and agreements for such properties (the "Company"), for the
consideration and on the terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
DEFINITIONS. For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"Acquired Company"--the Company.
"Adjustment Amount"--as defined in Section 2.5.
"Applicable Contract"--any Contract (a) under which the Acquired
Company has or may acquire any rights, (b) under which the Acquired Company has
or may become subject to any obligation or liability, or (c) by which the
Acquired Company or any of the assets owned or used by it is or may become
bound.
"Balance Sheet"--as defined in Section 3.4.
"Best Efforts"--the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible
"Breach"--a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Buyer"--as defined in the first paragraph of this Agreement.
"Closing"--as defined in Section 2.3.
"Closing Date"--the date and time as of which the Closing actually
takes place.
"Company"--as defined in the Recitals of this Agreement.
"Consent"--any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions"--all of the transactions contemplated by
this Agreement, including:
(a) The sale of the Shares by Sellers to Buyer;
(b) the execution, delivery, and performance of the Employment
Agreements, the Noncompetition Agreements, the Sellers' Releases;
(c) the performance by Buyer and Sellers of their respective
covenants and obligations, including the delivery of the Corporate
Guarantee from Buyer, under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and
exercise of control over the Acquired Companies.
"Contract"--any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Damages"--as defined in Section 10.2.
"Disclosure Letter"--the disclosure letter delivered by Sellers to
Buyer concurrently with the execution and delivery of this Agreement, attached
hereto as Exhibit A and made a part hereof.
"Employment Agreements"--as defined in
Section 2.4(a)(iii).
"Encumbrance"--any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"Environment"--soil, land surface or subsurface strata, surface waters
(including any waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental medium or
natural resource.
"Environmental, Health, and Safety Liabilities"--any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and
health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses
arising under Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective
action, including any investigation, cleanup, removal, containment, or
other remediation or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety and Health Law
(whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource
damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational
Safety and Health Law.
"Environmental Law"--any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees, and the
public of Armenia of intended or actual releases of pollutants or
hazardous substances or materials, violations of discharge limits, or
other prohibitions and of the commencements of activities, such as
resource extraction or construction, that could have significant impact
on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health
or the Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest to
recover for injuries done to public assets.
"Facilities"--any real property, leaseholds, or other interests
currently or formerly owned or operated by the Acquired Company and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by the Acquired
Company.
"GAAP"--generally accepted United States accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4(b) were prepared.
"Governmental Authorization"--any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body"--any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) national, marz, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature.
"Hazardous Activity"--the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Companies.
"Hazardous Materials"--any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Intellectual Property Assets"--as defined in
Section 3.22.
"Interim Balance Sheet"--as defined in
Section 3.4.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the
existence of such fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, executor, or trustee of
such Person (or in any similar capacity) has, or at any time had, Knowledge of
such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Noncompetition Agreements"--as defined in
Section 2.4(a) (iv).
"Occupational Safety and Health Law"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order"--any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorized by the board
such Person (or by any Person or group of Persons exercising similar
authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board (or by any
Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the certificate of formation, participants decisions, and the
charter or operating agreement of any limited liability company; (e) any charter
or similar document adopted or filed in connection with the creation, formation,
or organization of a Person; and (e) any minutes, protocols, or documents
related to a Person's decisions or actions; and (f) any amendment to any of the
foregoing.
"Person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Person"--with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity);
and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse, (iii) any other natural person who
is related to the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such individual, and
(b) "Material Interest" means direct or indirect beneficial ownership of voting
securities or other voting interests representing at least 20% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 20% of the outstanding equity securities or
equity interests in a Person.
"Release"--any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Representative"--with respect to a particular Person, any authorised
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"Sellers"--as defined in the first paragraph of this Agreement.
"Sellers' Releases"--as defined in Section 2.4.
"Shares"--as defined in the Recitals of this Agreement.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threat of Release"--a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened"--a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
SALE AND TRANSFER OF SHARES; CLOSING.
Shares. Subject to the terms and conditions of this Agreement, at the
Closing, Sellers will sell and transfer the Shares to Buyer, and Buyer will
purchase the Shares from Sellers.
Purchase Price. The purchase price (the "Purchase Price") for the
Shares will be Three Million Five Hundred Thousand United States Dollars
($3,500,000.00 USD), payable as follows: (a) Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx Dollars ($1,500,000 USD) at the Closing in exchange for Fifty One
percent (51%) of all of the Shares; respectively, at the Closing A shall receive
Seven Hundred Thirty Five Thousand Two Hundred Ninety Four US dollars and Twelve
US cents ($735,294.12 USD) for the Twenty Five percent (25%) out of Fifty
percent (50%) of its Shares, and B shall receive Seven Hundred Sixty Four
Thousand Seven Hundred Five US dollars and Eighty Eight cents ($764,705.88 USD);
and (b) Two Million United States Dollars ($2,000,000 USD) in exchange for the
remaining Forty Nine percent (49%) of Seller's shares to be paid within Two (2)
years of the date of the Closing; respectively, within Two (2) years of the date
of the Closing A shall receive One Million Twenty Thousand Four Hundred Eight US
dollars and Sixteen US cents ($1,020,408.16 USD), and B shall receive Nine
Hundred Seventy Nine Thousand Five Hundred Ninety One US dollars and Eighty Four
US cents ($979,591.84). Until the date Buyer has purchased the Forty Nine
percent (49%) balance of Sellers' Shares as provided in Section 2.2 (b) above,
the Company shall pay Sellers, in proportion to each one's Shares, annual profit
distributions from the Company's business activities; profit distributions shall
be made within Forty Five Days after the determination of annual profit.
Buyer shall give Ten (10) days advance notice of the payment provided in Section
2.2 (b) above, and on that date Sellers shall transfer the balance of their
Shares to Buyer; if Sellers fail in whole or in part to make such transfer, each
Seller hereby grants a limited power of attorney to Buyer's designee to execute
all necessary documents to effectuate the transfer in exchange for the agreed
payment. Purchase Price is inclusive of and the Sellers are solely and
separately responsible for all taxes, fees and levies, duties and other charges
applicable now or those which may become applicable in the future, including
such taxes, duties or other charges acknowledged retroactive, which may be
imposed on any of the Purchase Price (including, but not limited to, the
property tax, profit or income tax, VAT) (all taxes, duties or other charges
hereinafter collectively referred to as the "Taxes"), associated with, or
payment of, such Purchase Price. Buyer may calculate, and withhold from the
Purchase Price and pay any Tax on behalf of the Sellers.
Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Arax Consulting Yerevan, Armenia, at
10:00 a.m. (local time) on the later of (i) August 30, 2005 or (ii) the date
that is ten business days following the notice that all parties are prepared to
close, or at such other time and place as the parties may agree. Subject to the
provisions of Section 9, failure to consummate the purchase and sale provided
for in this Agreement on the date and time and at the place determined pursuant
to this Section 2.3 will not result in the termination of this Agreement and
will not relieve any party of any obligation under this Agreement.
Closing Obligations. At the Closing:
Sellers will deliver to Buyer:
certificates representing the Shares, duly endorsed
(or accompanied by duly executed powers), with signatures
guaranteed, for transfer to Buyer and corresponding changes to
the Company's official list of participants and charter;
releases in the form of
Exhibit 2.4(a)(ii) executed by Sellers (collectively,
"Sellers' Releases");
noncompetition agreements in
the form of Exhibit 2.4(a)(iv),
executed by Sellers (collectively, the
"Noncompetition Agreements"); and
a certificate executed by Sellers representing and
warranting to Buyer that each of Sellers' representations and
warranties in this Agreement was accurate in all respects as
of the date of this Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date (giving
full effect to any supplements to the Disclosure Letter that
were delivered by Sellers to Buyer prior to the Closing Date
in accordance with Section 5.5);
all records, assets, and
materials related to the Company, not
in the Company's possession as of the
Closing date; and
one or more special mining licenses and special
mining concession agreements covering the right to mine,
process, and sell gold and other minerals for terms of at
least Twenty (20) years at the properties described in the
Disclosure Letter.
Buyer will deliver to Sellers:
the following amounts totaling One Million Five
Hundred Thousand US Dollars ($1,500,000 USD) by bank cashier's
or certified check payable to the order of or by wire transfer
to accounts specified by A and B, respectively: Seven Hundred
Thirty Five Thousand Two Hundred Ninety Four US dollars and
Twelve US cents ($735,294.12) to A, and Seven Hundred Sixty
Four Thousand Seven Hundred Five US dollars and Eighty Eight
cents ($764,705.88 USD) to B;
a certificate executed by Buyer to the effect that,
except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and
is accurate in all respects as of the Closing Date as if made
on the Closing Date.
Corporate Guarantee issued by the Buyer for the
payment of the Two Million US dollars ($2,000,000 USD) to
Sellers within Two (2) years of the Closing date, as provided
in Section 2.2 above.
Buyer shall assume full management control of the Company and
shall be responsible for financing the development and operations of
the Company's properties. Sellers agree to execute documents and
otherwise cooperate in these actions as requested by Buyer, and Sellers
shall have the reasonable right to inspect the Company's books to
ensure they are receiving accurate profit distributions, for so long as
they continue to hold Shares in the Company.
Adjustment Amounts. The Adjustment Amount (which may be a positive or
negative number) will be equal to the difference, if any, in the value of the
assets from the date of this Agreement up to the Closing date.
Adjustment Procedure.
Sellers will prepare and will cause Xxxxx Exco, the Company's
certified public accountants, to audit consolidated financial
statements ("Closing Financial Statements") of the Company as of the
Closing Date and for the period from the date of the Balance Sheet
through the Closing Date, including an updated asset list. Sellers will
deliver the Closing Financial Statements to Buyer within sixty days
after the Closing Date. If within thirty days following delivery of the
Closing Financial Statements, Buyer has not given Sellers notice of its
objection to the Closing Financial Statements (such notice must contain
a statement of the basis of Buyer's objection), then the reflected in
the Closing Financial Statements will be used in computing the
Adjustment Amount. If Buyer gives such notice of objection, then the
issues in dispute will be submitted to KPMG (the "Accountants"), for
resolution. If issues in dispute are submitted to the Accountants for
resolution, (i) each party will furnish to the Accountants such
workpapers and other documents and information relating to the disputed
issues as the Accountants may request and are available to that party
or its Subsidiaries (or its independent public accountants), and will
be afforded the opportunity to present to the Accountants any material
relating to the determination and to discuss the determination with the
Accountants; (ii) the determination by the Accountants, as set forth in
a notice delivered to both parties by the Accountants, will be binding
and conclusive on the parties; and (iii) Buyer will bear the fees of
the Accountants for such determination.
On the tenth business day following the final determination of
the Adjustment Amount, if the Purchase Price is greater than the
aggregate of the payments made pursuant to Sections 2, Buyer will pay
the difference to Sellers, and if the Purchase Price is less than such
aggregate amount, Sellers will pay the difference to Buyer Payments
must be made in immediately available funds. Payments to Sellers must
be made in the manner and will be allocated in the proportions set
forth in Section 2.4(b) (i). Payments to Buyer must be made by wire
transfer to such bank account as Buyer will specify.
REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers
represent and warrant to Buyer as follows:
Organization and Good Standing.
Part 3.1 of the Disclosure Letter contains a complete and
accurate list for the Acquired Company of its name, its jurisdiction of
incorporation, other jurisdictions in which it is authorized to do
business, and its capitalization (including the identity of each
participant and the number of shares held by each). The Acquired
Company is a company duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under
Applicable Contracts. The Acquired Company is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
Sellers have delivered to Buyer copies of the Organizational
Documents of the Acquired Company, as currently in effect.
Authority; No Conflict.
This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against Sellers in accordance with
its terms. Upon the execution and delivery by Sellers of the Sellers'
Releases, and the Noncompetition Agreements (collectively, the
"Sellers' Closing Documents"), the Sellers' Closing Documents will
constitute the legal, valid, and binding obligations of Sellers,
enforceable against Sellers in accordance with their respective terms.
Sellers have the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Sellers' Closing
Documents and to perform their obligations under this Agreement and the
Sellers' Closing Documents.
Except as set forth in Part 3.2 of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time):
contravene, conflict with, or result in a violation
of any provision of the Organizational Documents of the
Acquired Company, or (B) any resolution adopted by the board
or the participants of the Acquired Company;
contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise
any remedy or obtain any relief under, any Legal Requirement
or any Order to which the Acquired Company or either Seller,
or any of the assets owned or used by the Acquired Company,
may be subject;
contravene, conflict with, or result in a violation
of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization
that is held by the Acquired Company or that otherwise relates
to the business of, or any of the assets owned or used by, the
Acquired Company;
cause Buyer or the Acquired
Company to become subject to, or to
become liable for the payment of, any
Tax;
cause any of the assets owned
by the Acquired Company to be
reassessed or revalued by any taxing
authority or other Governmental Body;
contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; or
result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or
used by the Acquired Company.
Except as set forth in Part 3.2 of the Disclosure Letter, no
Seller or the Acquired Company is or will be required to give
any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated
Transactions, including specifically but not limited to the
Company's rights to engage in commercial mining at Toukhmanouk
and the surrounding license areas well as to operate an
associated pilot plant there, including the sale of their
products domestically and for export.
Capitalization. The authorized equity of the Company consist of 50218
shares of participants interests, book value 50 218 000 AMD per share. Sellers
are and will be on the Closing Date the record and beneficial owners and holders
of the Shares, free and clear of all Encumbrances. A owns 25 109 of the Shares,
and B owns 25 109 of the Shares. No legend or other reference to any purported
Encumbrance appears upon any certificate representing the Shares of the Acquired
Company. All of the Shares of the Acquired Company have been duly registered4
are fully paid and nonassessable. There are no Contracts relating to the
issuance, sale, or transfer of any Shares or other securities of the Acquired
Company. None of the Shares or other securities of the Acquired Company was
issued in violation of any Legal Requirement. The Acquired Company does not own,
nor has any Contract to acquire, any equity securities or other securities of
any Person (other than Acquired Company) nor any direct or indirect equity nor
ownership interest in any other business.
Financial Statements. Sellers have delivered to Buyer: (a) consolidated
balance sheets of the Acquired Companies as at December 31 in each of the years
2001 through 2004, and the related consolidated statements of income, changes in
participants' equity, and cash flow for each of the fiscal years then ended,
together with the report thereon of Xxxxx Exco, independent certified public
accountants, (b) a consolidated balance sheet of the Acquired Company as at
December 31, 2004 (including the notes thereto, the "Balance Sheet"), and the
related consolidated statements of income, changes in participants' equity, and
cash flow for the fiscal year then ended, together with the report thereon of
Xxxxx Exco, independent certified public accountants, and (c) an unaudited
consolidated balance sheet of the Acquired Company as at June 30, 2005 (the
"Interim Balance Sheet") and the related unaudited consolidated statements of
income, changes in shareholders' equity, and cash flow for the three months then
ended, including in each case the notes thereto. Such financial statements and
notes fairly present the financial condition and the results of operations,
changes in shareholders' equity, and cash flow of the Acquired Company as at the
respective dates of and for the periods referred to in such financial
statements, all in accordance with GAAP; the financial statements referred to in
this Section 3.4 reflect the consistent application of such accounting
principles throughout the periods involved. No financial statements of any
Person other than the Acquired Company are required by GAAP to be included in
the consolidated financial statements of the Company.
Books and Records. The books of account, minute books, share record
books, and other records of the Acquired Company, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with sound business practices and applicable law, including the
maintenance of an adequate system of internal controls. The minute books of the
Acquired Company contain accurate and complete records of all meetings held of,
and Company action taken by, the participants, management, the Board, and
committees of the Board of the Acquired Company, and no meeting of any such
participants, management, Board, or committee has been held for which minutes
have not been prepared and are not contained in such minute books. At the
Closing, all of those books and records will be in the possession of the
Acquired Company.
Title to Properties; Encumbrances. Part 3.6 of the Disclosure Letter
contains a complete and accurate list of all real property, licenses, mining
agreements, leaseholds, or other interests therein owned by the Acquired
Company. Sellers have delivered or made available to Buyer copies of the deeds
and other instruments (as recorded) by which the Acquired Company acquired such
real property and interests, and copies of all title insurance policies,
opinions, abstracts, and surveys in the possession of Sellers or the Acquired
Company and relating to such property or interests. The Acquired Company owns
(with good and marketable title in the case of real property, subject only to
the matters permitted by the following sentence) all the properties, and assets
(whether real, personal, or mixed and whether tangible or intangible) that they
purport to own located in the facilities owned or operated by the Acquired
Company or reflected as owned in the books and records of the Acquired Company,
including all of the properties and assets reflected in the Balance Sheet and
the Interim Balance Sheet (except for assets held under capitalized leases
disclosed or not required to be disclosed in Part 3.6 of the Disclosure Letter
and personal property sold since the date of the Balance Sheet and the Interim
Balance Sheet, as the case may be, in the Ordinary Course of Business), and all
of the properties and assets purchased or otherwise acquired by the Acquired
Company since the date of the Balance Sheet (except for personal property
acquired and sold since the date of the Balance Sheet in the Ordinary Course of
Business and consistent with past practice) which subsequently purchased or
acquired properties and assets (other than inventory and short-term investments)
are listed in Part 3.6 of the Disclosure Letter. All material properties and
assets reflected in the Balance Sheet and the Interim Balance Sheet are free and
clear of all Encumbrances and are not, in the case of real property, subject to
any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except, with respect to all such
properties and assets, (a) mortgages or security interests shown on the Balance
Sheet or the Interim Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets after the date of the Interim Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired), with respect to
which no default (or event that, with notice or lapse of time or both, would
constitute a default) exists, (c) liens for current taxes not yet due, and (d)
with respect to real property, (i) minor imperfections of title, if any, none of
which is substantial in amount, materially detracts from the value or impairs
the use of the property subject thereto, or impairs the operations of the
Acquired Company, and (ii) zoning laws and other land use restrictions that do
not impair the present or anticipated use of the property subject thereto. All
buildings, plants, and structures owned by the Acquired Company lie wholly
within the boundaries of the real property owned by the Acquired Company and do
not encroach upon the property of, or otherwise conflict with the property
rights of, any other Person.
Condition and Sufficiency of Assets. The structures, and equipment of
the Acquired Company are structurally sound, are in good operating condition and
repair, and are adequate for the uses to which they are being put, and none of
such buildings, plants, structures, or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The building, plants, structures, and equipment of
the Acquired Company are sufficient for the continued conduct of the Acquired
Company's businesses after the Closing in substantially the same manner as
conducted prior to the Closing.
Accounts Receivable. All accounts receivable of the Acquired Company
that are reflected on the Balance Sheet or the Interim Balance Sheet or on the
accounting records of the Acquired Company as of the Closing Date (collectively,
the "Accounts Receivable") represent or will represent valid obligations arising
from sales actually made or services actually performed in the Ordinary Course
of Business. Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of the respective
reserves shown on the Balance Sheet or the Interim Balance Sheet or on the
accounting records of the Acquired Company as of the Closing Date (which
reserves are adequate and calculated consistent with past practice and, in the
case of the reserve as of the Closing Date, will not represent a greater
percentage of the Accounts Receivable as of the Closing Date than the reserve
reflected in the Interim Balance Sheet represented of the Accounts Receivable
reflected therein and will not represent a material adverse change in the
composition of such Accounts Receivable in terms of aging). Subject to such
reserves, each of the Accounts Receivable either has been or will be collected
in full, without any set-off, within ninety days after the day on which it first
becomes due and payable. There is no contest, claim, or right of set-off, other
than returns in the Ordinary Course of Business, under any Contract with any
obligor of an Accounts Receivable relating to the amount or validity of such
Accounts Receivable. Part 3.8 of the Disclosure Letter contains a complete and
accurate list of all Accounts Receivable as of the date of the Interim Balance
Sheet, which list sets forth the aging of such Accounts Receivable.
Inventory. All inventory of the Acquired Company, whether or not
reflected in the Balance Sheet or the Interim Balance Sheet, consists of a
quality and quantity usable and salable in the Ordinary Course of Business,
except for obsolete items and items of below-standard quality, all of which have
been written off or written down to net realizable value in the Balance Sheet or
the Interim Balance Sheet or on the accounting records of the Acquired Company
as of the Closing Date, as the case may be. All inventories not written off have
been priced at the lower of cost or balance value basis. The quantities of each
item of inventory (whether raw materials, work-in-process, or finished goods)
are not excessive, but are reasonable in the present circumstances of the
Acquired Company.
No Undisclosed Liabilities. Except as set forth in Part 3.10 of the
Disclosure Letter, the Acquired Company has no liabilities or obligations of any
nature (whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Balance Sheet or the Interim Balance Sheet and current liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.
Taxes.
The Acquired Company has filed or caused to be filed (on a
timely basis since 2001) all Tax Returns that are or were required to
be filed by or with respect to any of them, either separately or as a
member of a group of corporations, pursuant to applicable Legal
Requirements. Sellers have delivered to Buyer copies of, and Part 3.11
of the Disclosure Letter contains a complete and accurate list of, all
such Tax Returns filed since 2001. The Acquired Company has paid, or
made provision for the payment of, all Taxes that have or may have
become due pursuant to those Tax Returns or otherwise, or pursuant to
any assessment received by Sellers or the Acquired Company, except such
Taxes, if any, as are listed in Part 3.11 of the Disclosure Letter and
are being contested in good faith and as to which adequate reserves
(determined in accordance with GAAP) have been provided in the Balance
Sheet and the Interim Balance Sheet.
The Tax Returns of the Acquired Company subject to such Taxes
have been audited by the relevant tax authorities or are closed by the
applicable statute of limitations for all taxable years through 2004.
Part 3.11 of the Disclosure Letter contains a complete and accurate
list of all audits of all such Tax Returns, including a reasonably
detailed description of the nature and outcome of each audit. All
deficiencies proposed as a result of such audits have been paid,
reserved against, settled, or, as described in Part 3.11 of the
Disclosure Letter, are being contested in good faith by appropriate
proceedings. Part 3.11 of the Disclosure Letter describes all
adjustments to the Tax Returns filed by the Acquired Company for all
taxable years since 2001, and the resulting deficiencies proposed.
Except as described in Part 3.11 of the Disclosure Letter, no Seller or
the Acquired Company has given or been requested to give waivers or
extensions (or is or would be subject to a waiver or extension given by
any other Person) of any statute of limitations relating to the payment
of Taxes of the Acquired Company or for which the Acquired Company may
be liable.
The charges, accruals, and reserves with respect to Taxes on
the respective books of the Acquired Company are adequate (determined
in accordance with GAAP) and are at least equal to the Acquired
Company's liability for Taxes. There exists no proposed tax assessment
against the Acquired Company except as disclosed in the Balance Sheet
or in Part 3.11 of the Disclosure Letter. All Taxes that the Acquired
Company is or was required by Legal Requirements to withhold or collect
have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Body or other Person.
All Tax Returns filed by (or that include on a consolidated
basis) the Acquired Company are true, correct, and complete. There is
no tax sharing agreement that will require any payment by the Acquired
Company after the date of this Agreement.
No Material Adverse Change. Since the date of the Balance Sheet, there
has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Acquired Company, and no
event has occurred or circumstance exists that may result in such a material
adverse change.
Employee benefits.
As used in this Section 3.13, the following terms have the
meanings set forth below.
"Company Other Benefit Obligation" means any Obligation owed,
adopted, or followed by the Acquired Company.
"Company Plan" means all Plans of which the Acquired Company
or an Affiliate of the Acquired Company is or was a Plan
Sponsor, or to which the Acquired Company or an Affiliate of
the Acquired Company otherwise contributes or has contributed,
or in which the Acquired Company or an Affiliate of the
Acquired Company otherwise participates or has participated.
All references to Plans are to Company Plans unless the
context requires otherwise.
"Other Benefit Obligations" means all obligations,
arrangements, or customary practices, whether or not legally
enforceable, to provide benefits, other than salary, as
compensation for services rendered, to present or former
directors, employees, or agents, other than obligations,
arrangements, and practices that are Plans. Other Benefit
Obligations include consulting agreements under which the
compensation paid does not depend upon the amount of service
rendered, sabbatical policies, severance payment policies, and
fringe benefits.
(i) Part 3.13(i) of the Disclosure Letter contains a
complete and accurate list of all Company Plans and Company
Other Benefit Obligations, and identifies as such all Company
Plans.
Part 3.13(ii) of the Disclosure Letter contains a
complete and accurate list of (A) all Affiliates of the
Acquired Company, and (B) all Plans of which any such
Affiliate is or was a Plan Sponsor, in which any such
Affiliate participates or has participated, or to which any
such Affiliate contributes or has contributed.
Part 3.13(iii) of the Disclosure Letter sets forth a
calculation of the liability of the Acquired Company for
benefits.
Part 3.13(iv) of the Disclosure Letter sets forth the
financial cost of all obligations owed under any Company Plan
or Company Other Benefit Obligation.
Sellers have delivered to Buyer, or will deliver to Buyer
within ten days of the date of this Agreement:
all documents that set forth the terms of each
Company Plan or Company Other Benefit Obligation and of any
related matter, including (A) all plan descriptions and
summary plan descriptions, and (B) all summaries and
descriptions furnished to participants and beneficiaries
regarding Company Plans and Company Other Benefit Obligations;
all personnel, payroll, and
employment manuals and policies;
all collective bargaining and union agreements
pursuant to which contributions have been made or obligations
incurred by the Acquired Company and the Affiliates of the
Acquired Company, and all collective bargaining agreements
pursuant to which contributions are being made or obligations
are owed by such entities;
a written description of any
Company Plan or Company Other Benefit
Obligation that is not otherwise in
writing;
all statements filed with
respect to any Company Plan;
all insurance policies
purchased by or to provide benefits
under any Company Plan;
all contracts with third
parties that relate to any Company
Plan or Company Other Benefit
Obligation;
all reports submitted within the four years preceding
the date of this Agreement by third parties with respect to
any Company Plan or Company Other Benefit Obligation; and
all notifications to
employees of their rights.
Except as set forth in Part 3.13(vi) of the Disclosure Letter:
The Acquired Company have performed all of their
respective obligations under all Company Plans, Company Other
Benefit Obligations, and Company. The Acquired Company has
made appropriate entries in its financial records and
statements for all obligations and liabilities under such
Plans and Obligations that have accrued but are not due.
No statement, either written or oral, has been made
by the Acquired Company to any Person with regard to any Plan
or Other Benefit Obligation that was not in accordance with
the Plan or Other Benefit Obligation and that could have an
adverse economic consequence to the Acquired Company or to
Buyer.
The Acquired Company, with respect to all Company
Plans and Company Other Benefits Obligations are, and each
Company Plan and Company Other Benefit Obligation is, in full
compliance with applicable laws.
Each Company Plan can be terminated within thirty
days, without payment of any additional contribution or amount
and without the vesting or acceleration of any benefits
promised by such Plan.
Since June 30, 2005, there has been no establishment
or amendment of any Company Plan or Company Other Benefit
Obligation.
No event has occurred or circumstance exists that
could result in a material increase in premium costs of
Company Plans and Company Other Benefit Obligations that are
insured, or a material increase in benefit costs of such Plans
and Obligations that are self-insured.
Other than claims for benefits submitted by
participants or beneficiaries, no claim against, or legal
proceeding involving, any Company Plan or, Company Other
Benefit Obligation is pending or, to Sellers' Knowledge, is
Threatened.
No Company Plan is a stock bonus, pension, or
profit-sharing plan.
The consummation of the Contemplated Transactions
will not result in the payment, vesting, or acceleration of
any benefit.
Compliance with Legal Requirements;
Governmental Authorizations.
Except as set forth in Part 3.14 of the Disclosure Letter:
the Acquired Company is, and at all times since
December 11, 2000 has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct
or operation of its business or the ownership or use of any of
its assets;
no event has occurred or circumstance exists that
(with or without notice or lapse of time) (A) may constitute
or result in a violation by the Acquired Company of, or a
failure on the part of the Acquired Company to comply with,
any Legal Requirement, or (B) may give rise to any obligation
on the part of the Acquired Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any
nature; and
the Acquired Company has not received, at any time
since December 11, 2000, any notice or other communication
(whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of the Acquired Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
Part 3.14 of the Disclosure Letter contains a complete and
accurate list of each Governmental Authorization that is held by the
Acquired Company or that otherwise relates to the business of, or to
any of the assets owned or used by, the Acquired Company. Each
Governmental Authorization listed or required to be listed in Part 3.14
of the Disclosure Letter is valid and in full force and effect, and
copies of each are attached to the Disclosure Letter. Except as set
forth in Part 3.14 of the Disclosure Letter:
the Acquired Company is, and at all times since
December 11, 2000 has been, in full compliance with all of the
terms and requirements of each Governmental Authorization
identified or required to be identified in Part 3.14 of the
Disclosure Letter;
no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or
result directly or indirectly in a violation of or a failure
to comply with any term or requirement of any Governmental
Authorization listed or required to be listed in Part 3.14 of
the Disclosure Letter, or (B) result directly or indirectly in
the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Part 3.14 of
the Disclosure Letter;
the Acquired Company has not received, at any time
since December 11, 2000 any notice or other communication
(whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or
modification to any Governmental Authorization; and
all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required
to be listed in Part 3.14 of the Disclosure Letter have been
duly filed on a timely basis with the appropriate Governmental
Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly
made on a timely basis with the appropriate Governmental
Bodies.
The Governmental Authorizations listed in Part 3.14 of the Disclosure
Letter collectively constitute all of the Governmental Authorizations
necessary to permit the Acquired Company to lawfully explore for, mine,
process, sell domestically and export gold, silver, and other metals in
commercially reasonable quantities as well as to lawfully conduct and
operate their businesses in the manner they currently conduct and
operate such businesses and to permit the Acquired Company to own and
use their assets in the manner in which they currently own and use such
assets.
Legal Proceedings; Orders.
Except as set forth in Part 3.15 of the Disclosure Letter,
there is no pending Proceeding:
that has been commenced by or against the Acquired
Company or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, the
Acquired Company; or
that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of Sellers and the Acquired Company, (1) no such
Proceeding has been Threatened, and (2) no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. Sellers have delivered to Buyer
copies of all pleadings, correspondence, and other documents relating
to each Proceeding listed in Part 3.15 of the Disclosure Letter. The
Proceedings listed in Part 3.15 of the Disclosure Letter will not have
a material adverse effect on the business, operations, assets,
condition, or prospects of the Acquired Company.
Except as set forth in Part 3.15 of the Disclosure Letter:
there is no Order to which
the Acquired Company, or any of the
assets owned or used by the Acquired
Company, is subject;
neither Seller is subject to
any Order that relates to the business
of, or any of the assets owned or used
by, the Acquired Company; and
no officer, director, agent, or employee of the
Acquired Company is subject to any Order that prohibits such
officer, director, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the
business of the Acquired Company.
Except as set forth in Part 3.15 of the Disclosure Letter:
the Acquired Company is, and at all times since
Decenber 111, 2000 has been, in full compliance with all of
the terms and requirements of each Order to which it, or any
of the assets owned or used by it, is or has been subject;
no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of
time) a violation of or failure to comply with any term or
requirement of any Order to which the Acquired Company, or any
of the assets owned or used by the Acquired Company, is
subject; and
the Acquired Company has not received, at any time
since December 11, 2000any notice or other communication
(whether oral or written) from any Governmental Body or any
other Person regarding any actual, alleged, possible, or
potential violation of, or failure to comply with, any term or
requirement of any Order to which the Acquired Company, or any
of the assets owned or used by the Acquired Company, is or has
been subject.
Absence of Certain Changes and Events. Except as set forth in Part 3.16
of the Disclosure Letter, since the date of the Balance Sheet, the Acquired
Company has conducted businesses only in the Ordinary Course of Business and
there has not been any:
change in the Acquired Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital
stock of the Acquired Company; issuance of any security convertible
into such capital stock; grant of the registration rights; purchase,
redemption, retirement, or other acquisition by the Acquired Company of
any shares of any such capital stock; or declaration or payment of any
dividend or other distribution or payment in respect of shares of
capital stock;
amendment to the Organizational
Documents of the Acquired Company;
payment or increase by the Acquired Company of any bonuses,
salaries, or other compensation to any participant, director, officer,
or (except in the Ordinary Course of Business) employee or entry into
any employment, severance, or similar Contract with any director,
officer, or employee;
adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any
employees of the Acquired Company;
damage to or destruction or loss of any asset or property of
the Acquired Company, whether or not covered by insurance, materially
and adversely affecting the properties, assets, business, financial
condition, or prospects of the Acquired Company, taken as a whole;
entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (ii)
any Contract or transaction involving a total remaining commitment by
or to the Acquired Company of at least One Thousand US Dollars
($1,000.00);
sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of the
Acquired Company or mortgage, pledge, or imposition of any lien or
other encumbrance on any material asset or property of the Acquired
Company, including the sale, lease, or other disposition of any of the
Intellectual Property Assets;
cancellation or waiver of any claims or rights with a value to
the Acquired Company in excess of One Thousand US Dollars ($1,000.00);
material change in the accounting
methods used by the Acquired Company; or
agreement, whether oral or written, by
the Acquired Company to do any of the foregoing.
Contracts; No Defaults.
Part 3.17(a) of the Disclosure Letter contains a complete and
accurate list, and Sellers have delivered to Buyer true and complete
copies, of:
each Applicable Contract that involves performance of
services or delivery of goods or materials by the Acquired
Company of an amount or value in excess of One Thousand US
Dollars ($1,000.00);
each Applicable Contract that involves performance of
services or delivery of goods or materials to one or more
Acquired Company of an amount or value in excess of One
Thousand US Dollars ($1,000.00);
each Applicable Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures
or receipts of one or more Acquired Company in excess of One
Thousand US Dollars ($1,000.00);
each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other
Applicable Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any
real or personal property (except personal property leases and
installment and conditional sales agreements having a value
per item or aggregate payments of less than One thousand US
Dollars ($1,000.00) and with terms of less than one year);
each licensing agreement or other Applicable Contract
with respect to patents, trademarks, copyrights, or other
intellectual property, including agreements with current or
former employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
each collective bargaining agreement and other
Applicable Contract to or with any labor union or other
employee representative of a group of employees;
each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits,
losses, costs, or liabilities by the Acquired Company with any
other Person;
each Applicable Contract containing covenants that in
any way purport to restrict the business activity of the
Acquired Company or the Affiliate of the Acquired Company or
limit the freedom of the Acquired Company or any Affiliate of
the Acquired Company to engage in any line of business or to
compete with any Person;
each Applicable Contract providing for payments to or
by any Person based on sales, purchases, or profits, other
than direct payments for goods;
each power of attorney that
is currently effective and outstanding;
each Applicable Contract entered into other than in
the Ordinary Course of Business that contains or provides for
an express undertaking by the Acquired Company to be
responsible for consequential damages;
each Applicable Contract for
capital expenditures in excess of Five
Thousand US Dollars ($5,000.00);
each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended
by the Acquired Company other than in the Ordinary Course of
Business; and
each amendment, supplement,
and modification (whether oral or
written) in respect of any of the
foregoing.
Part 3.17(a) of the Disclosure Letter sets forth reasonably complete
details concerning such Contracts, including the parties to the
Contracts, the amount of the remaining commitment of the Acquired
Company under the Contracts, and the Acquired Company's office where
details relating to the Contracts are located.
Except as set forth in Part 3.17(b) of the Disclosure Letter:
neither Seller (and no Related Person of either
Seller) has or may acquire any rights under, and neither
Seller has or may become subject to any obligation or
liability under, any Contract that relates to the business of,
or any of the assets owned or used by, the Acquired Company;
and
no officer, director, participant, agent, employee,
consultant, or contractor of the Acquired Company is bound by
any Contract that purports to limit the ability of such
officer, director, participant, agent, employee, consultant,
or contractor to (A) engage in or continue any conduct,
activity, or practice relating to the business of the Acquired
Company, or (B) assign to the Acquired Company or to any other
Person any rights to any invention, improvement, or discovery.
Except as set forth in Part 3.17(c) of the Disclosure Letter,
each Contract identified or required to be identified in Part 3.17(a)
of the Disclosure Letter is in full force and effect and is valid and
enforceable in accordance with its terms.
Except as set forth in Part 3.17(d) of the Disclosure Letter:
the Acquired Company is, and at all times since
December 11, 2000 has been, in full compliance with all
applicable terms and requirements of each Contract under which
such Acquired Company has or had any obligation or liability
or by which such Acquired Company or any of the assets owned
or used by such Acquired Company is or was bound;
each other Person that has or had any obligation or
liability under any Contract under which the Acquired Company
has or had any rights is, and at all times since December 11,
2000 has been, in full compliance with all applicable terms
and requirements of such Contract;
no event has occurred or circumstance exists that
(with or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of, or give
the Acquired Company or other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Applicable Contract; and
the Acquired Company has not given to or received
from any other Person, at any time since January 1, 2001, any
notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
There are no renegotiations of, attempts to renegotiate or
outstanding rights to renegotiate any material amounts paid or payable
to the Acquired Company under current or completed Contracts with any
Person and no such Person has made written demand for such
renegotiation.
The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Acquired Company have been
entered into in the Ordinary Course of Business and have been entered
into without the commission of any act alone or in concert with any
other Person, or any consideration having been paid or promised, that
is or would be in violation of any Legal Requirement.
Insurance.
Sellers have delivered to Buyer:
true and complete copies of all policies of insurance
to which the Acquired Company is a party or under which the
Acquired Company, or any director of the Acquired Company, is
or has been covered at any time within the three years
preceding the date of this Agreement;
true and complete copies of
all pending applications for policies
of insurance; and
any statement by the auditor of the Acquired
Company's financial statements with regard to the adequacy of
such entity's coverage or of the reserves for claims.
Part 3.18(b) of the Disclosure Letter
describes:
any self-insurance
arrangement by or affecting the
Acquired Company, including any
reserves established thereunder;
any contract or arrangement,
other than a policy of insurance, for
the transfer or sharing of any risk by
the Acquired Company; and
all obligations of the Acquired Company to third
parties with respect to insurance (including such obligations
under leases and service agreements) and identifies the policy
under which such coverage is provided.
Part 3.18(c) of the Disclosure Letter sets forth, by year, for
the current policy year and each of the three preceding policy years:
a summary of the loss
experience under each policy;
a statement describing each claim under an insurance
policy for an amount in excess of One Thousand US Dollars
($1,000.00), which sets forth:
the name of the
claimant;
a description of the
policy by insurer, type of
insurance, and period of
coverage; and
the amount and a
brief description of the
claim; and
a statement describing the loss experience for all
claims that were self-insured, including the number and
aggregate cost of such claims.
Except as set forth on Part 3.18(d) of the Disclosure Letter:
All policies to which the Acquired Company is a party
or that provide coverage to either Seller, the Acquired
Company, or any director or officer of the Acquired Company:
are valid,
outstanding, and enforceable;
are issued by an
insurer that is financially
sound and reputable;
taken together,
provide adequate insurance
coverage for the assets and
the operations of the
Acquired Company;
are sufficient for
compliance with all Legal
Requirements and Contracts to
which the Acquired Company is
a party or by which any of
them is bound;
will continue in
full force and effect
following the consummation of
the Contemplated
Transactions; and
do not provide for any retrospective premium
adjustment or other experienced-based liability on
the part of the Acquired Company.
No Seller or the Acquired Company has received (A)
any refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy
is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to
perform its obligations thereunder.
The Acquired Company has paid all premiums due, and
have otherwise performed all of their respective obligations,
under each policy to which the Acquired Company is a party or
that provides coverage to the Acquired Company or director
thereof.
The Acquired Company has given notice to the insurer
of all claims that may be insured thereby.
Environmental Matters. Except as set forth in
part 3.19 of the disclosure letter:
The Acquired Company is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable
under, any Environmental Law. No Seller or the Acquired Company has any
basis to expect, nor has any of them or any other Person for whose
conduct they are or may be held to be responsible received, any actual
or Threatened order, notice, or other communication from (i) any
Governmental Body or private citizen acting in the public interest, or
(ii) the current or prior owner or operator of any Facilities, of any
actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to
undertake or bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any of the Facilities or any other
properties or assets (whether real, personal, or mixed) in which
Sellers or the Acquired Company has had an interest, or with respect to
any property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used, or
processed by Sellers, the Acquired Company, or any other Person for
whose conduct they are or may be held responsible, or from which
Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
There are no pending or, to the Knowledge of Sellers and the
Acquired Company, Threatened claims, Encumbrances, or other
restrictions of any nature, resulting from any Environmental, Health,
and Safety Liabilities or arising under or pursuant to any
Environmental Law, with respect to or affecting any of the Facilities
or any other properties and assets (whether real, personal, or mixed)
in which Sellers or the Acquired Company has or had an interest.
No Seller or the Acquired Company has any basis to expect, nor
has any of them or any other Person for whose conduct they are or may
be held responsible, received, any citation, directive, inquiry,
notice, Order, summons, warning, or other communication that relates to
Hazardous Activity, Hazardous Materials, or any alleged, actual, or
potential violation or failure to comply with any Environmental Law, or
of the alleged, actual, or potential obligation to undertake or bear
the cost of any Environmental, Health, and Safety Liabilities with
respect to any of the Facilities or any other properties or assets
(whether real, personal, or mixed) in which Sellers or the Acquired
Company had an interest, or with respect to any property or facility to
which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by Sellers, the Acquired
Company, or any other Person for whose conduct they are or may be held
responsible, have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
No Seller or the Acquired Company, or any other Person for
whose conduct they are or may be held responsible, has any
Environmental, Health, and Safety Liabilities with respect to the
Facilities or with respect to any other properties and assets (whether
real, personal, or mixed) in which Sellers or the Acquired Company (or
any predecessor), has or had an interest, or at any property
geologically or hydrologically adjoining the Facilities or any such
other property or assets.
There are no Hazardous Materials present on or in the
Environment at the Facilities or at any geologically or hydrologically
adjoining property, including any Hazardous Materials contained in
barrels, above or underground storage tanks, landfills, land deposits,
dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water,
sumps, or any other part of the Facilities or such adjoining property,
or incorporated into any structure therein or thereon. No Seller, the
Acquired Company, any other Person for whose conduct they are or may be
held responsible, or any other Person, has permitted or conducted, or
is aware of, any Hazardous Activity conducted with respect to the
Facilities or any other properties or assets (whether real, personal,
or mixed) in which Sellers or the Acquired Company has or had an
interest.
There has been no Release or, to the Knowledge of Sellers and
the Acquired Company, Threat of Release, of any Hazardous Materials at
or from the Facilities or at any other locations where any Hazardous
Materials were generated, manufactured, refined, transferred, produced,
imported, used, or processed from or by the Facilities, or from or by
any other properties and assets (whether real, personal, or mixed) in
which Sellers or the Acquired Company has or had an interest, or any
geologically or hydrologically adjoining property, whether by Sellers,
the Acquired Company, or any other Person.
Sellers have delivered to Buyer true and complete copies and
results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Sellers or the Acquired Company pertaining to
Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by Sellers, the Acquired Company,
or any other Person for whose conduct they are or may be held
responsible, with Environmental Laws.
Employees.
Part 3.20 of the Disclosure Letter contains a complete and
accurate list of the following information for each employee or
director of the Acquired Company, including each employee on leave of
absence or layoff status: employer; name; job title; current
compensation paid or payable and any change in compensation since
December 11, 2000; vacation accrued; and service credited for purposes
of vesting and eligibility to participate under any pension,
retirement, profit-sharing, thrift-savings, deferred compensation,
stock bonus, stock option, cash bonus, employee stock ownership
(including investment credit or payroll stock ownership), severance
pay, insurance, medical, welfare, or vacation plan, other Employee
Pension Benefit Plan or Employee Welfare Benefit Plan, or any other
employee benefit plan or any Director Plan.
No employee, participant, or director of the Acquired Company
is a party to, or is otherwise bound by, any agreement or arrangement,
including any confidentiality, noncompetition, or proprietary rights
agreement, between such employee or director and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or
will affect (i) the performance of his duties as an employee or
director of the Acquired Company, or (ii) the ability of the Acquired
Company to conduct its business, including any Proprietary Rights
Agreement with Sellers or the Acquired Company by any such employee or
director.
Part 3.20 of the Disclosure Letter also contains a complete
and accurate list of the following information for each retired
employee or director of the Acquired Company, or their dependents,
receiving benefits or scheduled to receive benefits in the future:
name, pension benefit, pension option election, retiree medical
insurance coverage, retiree life insurance coverage, and other
benefits.
Labor Relations; Compliance. Since December 11, 2000, the Acquired
Company has not been nor is a party to any collective bargaining or other labor
Contract. Since December 11, 2000, there has not been, there is not presently
pending or existing, and there is not Threatened, (a) any strike, slowdown,
picketing, work stoppage, or employee grievance process, or (b) any Proceeding
against or affecting the Acquired Company relating to the alleged violation of
any Legal Requirement pertaining to labor relations or employment matters. No
event has occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute. There is no lockout of any employees by
the Acquired Company, and no such action is contemplated by the Acquired
Company. The Acquired Company has complied in all respects with all Legal
Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. The Acquired Company is not liable for the payment of
any compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
Intellectual Property.
Intellectual Property Assets. The
term "Intellectual Property Assets" includes:
the name, Mego Gold, all fictional business names,
trading names, registered and unregistered trademarks, service
marks, and applications (collectively, "Marks");
all patents, patent
applications, and inventions and
discoveries that may be patentable
(collectively, "Patents");
all copyrights in both
published works and unpublished works
(collectively, "Copyrights"); and
all know-how, trade secrets, confidential
information, customer lists, software, technical information,
data, process technology, plans, drawings, and blue prints
(collectively, "Trade Secrets"); owned, used, or licensed by
the Acquired Company as licensee or licensor.
Agreements. Part 3.22(b) of the Disclosure Letter contains a
complete and accurate list and summary description, including any
royalties paid or received by the Acquired Company, of all Contracts
relating to the Intellectual Property Assets to which the Acquired
Company is a party or by which the Acquired Company is bound, except
for any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available software programs with a value of less
than One Thousand US Dollars ($1,000.00) under which the Acquired
Company is the licensee. There are no outstanding and, to Sellers'
Knowledge, no Threatened disputes or disagreements with respect to any
such agreement.
Know-How Necessary for the Business.
The Intellectual Property Assets are all those
necessary for the operation of the Acquired Company's
businesses as they are currently conducted. The Acquired
Company is the owner of all right, title, and interest in and
to each of the Intellectual Property Assets, free and clear of
all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use
without payment to a third party all of the Intellectual
Property Assets.
Except as set forth in Part 3.22(c) of the Disclosure
Letter, all former and current employees of the Acquired
Company have executed written Contracts with the Acquired
Company that assign to the Acquired Company all rights to any
inventions, improvements, discoveries, or information relating
to the business of the Acquired Company. No employee of the
Acquired Company has entered into any Contract that restricts
or limits in any way the scope or type of work in which the
employee may be engaged or requires the employee to transfer,
assign, or disclose information concerning his work to anyone
other than the Acquired Company.
Patents.
Part 3.22(d) of the Disclosure Letter contains a
complete and accurate list and summary description of all
Patents. One or more of the Acquired Company is the owner of
all right, title, and interest in and to each of the Patents,
free and clear of all liens, security interests, charges,
encumbrances, entities, and other adverse claims.
All of the issued Patents are currently in compliance
with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety
days after the Closing Date.
No Patent has been or is now involved in any
interference, reissue, reexamination, or opposition
proceeding. To Sellers' Knowledge, there is no potentially
interfering patent or patent application of any third party.
No Patent is infringed or, to Sellers' Knowledge, has
been challenged or threatened in any way. None of the products
manufactured and sold, nor any process or know-how used, by
the Acquired Company infringes or is alleged to infringe any
patent or other proprietary right of any other Person.
Trademarks.
Part 3.22(e) of Disclosure Letter contains a complete
and accurate list and summary description of all Marks. The
Acquired Company is the owner of all right, title, and
interest in and to each of the Marks, free and clear of all
liens, security interests, charges, encumbrances, equities,
and other adverse claims.
No Xxxx has been or is now involved in any
opposition, invalidation, or cancellation and, to Sellers'
Knowledge, no such action is Threatened with the respect to
any of the Marks.
To Sellers' Knowledge, there is no potentially
interfering trademark or trademark application of any third
party.
No Xxxx is infringed or, to Sellers' Knowledge, has
been challenged or threatened in any way. None of the Marks
used by the Acquired Company infringes or is alleged to
infringe any trade name, trademark, or service xxxx of any
third party.
Copyrights.
Part 3.22(f) of the Disclosure Letter contains a
complete and accurate list and summary description of all
Copyrights. The Acquired Company is the owner of all right,
title, and interest in and to each of the Copyrights, free and
clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims.
All the Copyrights have been registered and are
currently in compliance with formal legal requirements, are
valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after
the date of Closing.
No Copyright is infringed or, to Sellers' Knowledge,
has been challenged or threatened in any way. None of the
subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
All works encompassed by the Copyrights have been
marked with the proper copyright notice.
Trade Secrets.
With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and
sufficient in detail and content to identify and explain it
and to allow its full and proper use without reliance on the
knowledge or memory of any individual.
Sellers and the Acquired Company have taken all
reasonable precautions to protect the secrecy,
confidentiality, and value of their Trade Secrets.
The Acquired Company has good title and an absolute
(but not necessarily exclusive) right to use the Trade
Secrets. The Trade Secrets are not part of the public
knowledge or literature, and, to Sellers' Knowledge, have not
been used, divulged, or appropriated either for the benefit of
any Person (other than the Acquired Company) or to the
detriment of the Acquired Company. No Trade Secret is subject
to any adverse claim or has been challenged or threatened in
any way.
Certain Payments. Since December 11, 2000, the Acquired Company has not
nor has any director, officer, participant, Seller, agent, or employee of the
Acquired Company, or any other Person associated with or acting for or on behalf
of the Acquired Company, directly or indirectly (a) made any contribution, gift,
bribe, rebate, payoff, influence payment, kickback, or other payment to any
Person, private or public, regardless of form, whether in money, property, or
services (i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of the Acquired
Company or any Affiliate of an Acquired Company, or (iv) in violation of any
Legal Requirement, (b) established or maintained any fund or asset that has not
been recorded in the books and records of the Acquired Company.
Disclosure.
No representation or warranty of Sellers in this Agreement and
no statement in the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
No notice given pursuant to Section 5.5 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances
in which they were made, not misleading.
There is no fact known to either Seller that has specific
application to either Seller or the Acquired Company (other than
general economic or industry conditions) and that materially adversely
affects the assets, business, prospects, financial condition, or
results of operations of the Acquired Company (on a consolidated basis)
that has not been set forth in this Agreement or the Disclosure Letter.
Relationships with Related Persons. No Seller or any Related Person of
Sellers or of the Acquired Company has, or has had, any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the Acquired Company's businesses. No Seller or any Related
Person of Sellers or of the Acquired Company is, or since has owned (of record
or as a beneficial owner) an equity interest or any other financial or profit
interest in, a Person that has (i) had business dealings or a material financial
interest in any transaction with the Acquired Company, or (ii) engaged in
competition with the Acquired Company (a "Competing Business") in any market
presently served by the Acquired Company. Except as set forth in Part 3.25 of
the Disclosure Letter, no Seller or any Related Person of Sellers or of the
Acquired Company is a party to any Contract with, or has any claim or right
against, the Acquired Company.
Brokers or Finders. Sellers and their agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
represents and warrants to Sellers as follows:
Organization and Good Standing. Buyer is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, USA. Until Buyer purchases the Seller's 49%, the Buyer shall
not change its organizational form, and shall not change or otherwise allianate
its 51% share, without the Seller's concent.
Authority; No Conflict.
This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and to perform its
obligations under this Agreement.
Except as set forth in Schedule 4.2, neither the execution and
delivery of this Agreement by Buyer nor the consummation or performance
of any of the Contemplated Transactions by Buyer will give any Person
the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to:
any provision of Buyer's
Organizational Documents;
any resolution adopted by the
board or the member(s) of Buyer;
any Legal Requirement or
Order to which Buyer may be subject; or
any Contract to which Buyer
is a party or by which Buyer may be
bound.
Except as set forth in Schedule 4.2, Buyer is not and will not be
required to obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
Investment Intent. Buyer is acquiring the
Shares for its own account.
Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
Brokers or Finders. Buyer and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement and will indemnify and hold Sellers harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its
officers or agents.
COVENANTS OF SELLERS PRIOR TO CLOSING DATE.
Access and investigation. Between the date of this Agreement and the
Closing Date, Sellers will, and will cause the Acquired Company and its
Representatives to, (a) afford Buyer and its Representatives and prospective
lenders and their Representatives (collectively, "Buyer's Advisors") full and
free access to each Acquired Company's personnel, properties (including
subsurface testing), contracts, books and records, and other documents and data,
(b) furnish Buyer and Buyer's Advisors with copies of all such contracts, books
and records, and other existing documents and data as Buyer may reasonably
request, and (c) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information as Buyer may reasonably
request.
Operation of the Businesses of the Acquired Company. Between the date
of this Agreement and the Closing Date, Sellers will, and will cause the
Acquired Company to:
conduct the business of such Acquired
Company only in the Ordinary Course of Business;
use their Best Efforts to preserve intact the current business
organization of such Acquired Company, keep available the services of
the current officers, employees, and agents of such Acquired Company,
and maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents, and others having business
relationships with such Acquired Company;
confer with Buyer concerning
operational matters of a material nature; and
otherwise report periodically to Buyer concerning the status
of the business, operations, and finances of such Acquired Company.
Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Sellers will
not, and will cause the Acquired Company not to, without the prior consent of
Buyer, take any affirmative action, or fail to take any reasonable action within
their or its control, as a result of which any of the changes or events listed
in Section 3.16 is likely to occur.
Required Approvals. As promptly as practicable after the date of this
Agreement, Sellers will, and will cause the Acquired Company to, make all
filings required by Legal Requirements to be made by them in order to consummate
the Contemplated Transactions (including the qualification of the Acquired
Company as a foreign investor under Armenian law). Between the date of this
Agreement and the Closing Date, Sellers will, and will cause each Acquired
Company to, (a) cooperate with Buyer with respect to all filings that Buyer
elects to make or is required by Legal Requirements to make in connection with
the Contemplated Transactions, and (b) cooperate with Buyer in obtaining all
consents identified in Schedule 4.2 of the Disclosure Letter.
Notification. Between the date of this Agreement and the Closing Date,
each Seller will promptly notify Buyer in writing if such Seller or the Acquired
Company becomes aware of any fact or condition that causes or constitutes a
Breach of any of Sellers' representations and warranties as of the date of this
Agreement, or if such Seller or the Acquired Company becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the
Disclosure Letter if the Disclosure Letter were dated the date of the occurrence
or discovery of any such fact or condition, Sellers will promptly deliver to
Buyer a supplement to the Disclosure Letter specifying such change. During the
same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Sellers in this Section 5 or of the occurrence of any
event that may make the satisfaction of the conditions in Section 7 impossible
or unlikely.
Payment of Indebtedness by Related Persons. Except as expressly
provided in this Agreement, Sellers will cause all indebtedness owed to the
Acquired Company by either Seller or any Related Person of either Seller to be
paid in full prior to Closing.
No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, Sellers will not, and will cause the Acquired
Company and each of their Representatives not to, directly or indirectly
solicit, initiate, or encourage any inquiries or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any Person (other than Buyer)
relating to any transaction involving the sale of the business or assets (other
than in the Ordinary Course of Business) of the Acquired Company, or any of the
capital stock of the Acquired Company, or any merger, consolidation, business
combination, or similar transaction involving the Acquired Company.
Best Efforts. Between the date of this Agreement and the Closing Date,
Sellers will use their Best Efforts to cause the conditions in Sections 7 and 8
to be satisfied.
COVENANTS OF BUYER PRIOR TO CLOSING DATE.
Approvals of Governmental Bodies. As promptly as practicable after the
date of this Agreement, Buyer will, and will cause each of its Related Persons
to, make all filings required by Legal Requirements to be made by them to
consummate the Contemplated Transactions. Between the date of this Agreement and
the Closing Date, Buyer will, and will cause each Related Person to, cooperate
with Sellers with respect to all filings that Sellers are required by Legal
Requirements to make in connection with the Contemplated Transactions, and (ii)
cooperate with Sellers in obtaining all consents identified in Part 3.2 of the
Disclosure Letter; provided that this Agreement will not require Buyer to
dispose of or make any change in any portion of its business or to incur any
other burden to obtain a Governmental Authorization.
Best Efforts. Except as set forth in the proviso to Section 6.1,
between the date of this Agreement and the Closing Date, Buyer will use its Best
Efforts to cause the conditions in Sections 7 and 8 to be satisfied.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's obligation to
purchase the Shares and to take the other actions required to be taken by Buyer
at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Buyer, in whole
or in part):
Accuracy of Representations.
All of Sellers' representations and warranties in this
Agreement (considered collectively), and each of these representations
and warranties (considered individually), must have been accurate in
all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on
the Closing Date, without giving effect to any supplement to the
Disclosure Letter.
Each of Sellers' representations and warranties must have been
accurate in all respects as of the date of this Agreement, and must be
accurate in all respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Disclosure
Letter.
Sellers' Performance.
All of the covenants and obligations that Sellers are required
to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed
and complied with in all material respects.
Each document required to be delivered pursuant to Section 2.4
must have been delivered, and each of the other covenants and
obligations must have been performed and complied with in all respects.
Consents. Each of the Consents identified in Part 3.2 of the Disclosure
Letter and each Consent identified in Schedule 4.2, must have been obtained and
must be in full force and effect.
Additional Documents. Each of the following
documents must have been delivered to Buyer:
An opinion of legal counsel, dated as
of the closing date in the form of Exhibit
7.4(a);
such other documents as Buyer may reasonably request for the
purpose of (i) enabling its counsel to provide the opinion referred to
in Section 8.4(a), (ii) evidencing the accuracy of any of Sellers'
representations and warranties, (iii) evidencing the performance by
either Seller of, or the compliance by either Seller with, any covenant
or obligation required to be performed or complied with by such Seller,
(iv) evidencing the satisfaction of any condition referred to in this
Section 7, or (v) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
No Proceedings. Since the date of this Agreement, there must not have
been commenced or Threatened against Buyer, or against any Person affiliated
with Buyer, any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
No Claim Regarding Share Ownership or Sale Proceeds. There must not
have been made or Threatened by any Person any claim asserting that such Person
(a) is the holder or the beneficial owner of, or has the right to acquire or to
obtain beneficial ownership of, any stock of, or any other voting, equity, or
ownership interest in, the Acquired Company, or (b) is entitled to all or any
portion of the Purchase Price payable for the Shares.
No Prohibition. Neither the consummation nor the performance of any of
the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any Governmental Body.
7.8 Technical Results. Analyses of representative ore samples and
concentrate produced there from at the plant taken by Buyer and independently
tested for content and processing meet or surpass the amounts and recovery
percentages reported in the GKZ analyses provided to Buyer.
7.9 Tax Liabilities. Sellers shall deliver a binding release from the
Armenian Tax Ministry describing all Tax consequences related to the
Contemplated Transactions and Sellers shall assume sole and full liability for
any and all Tax consequences, stated or unstated, actual or potential, in
connection with the Acquired Company prior to and including the consummation of
all of the Contemplated Transactions.
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE. Sellers' obligation to
sell the Shares and to take the other actions required to be taken by Sellers at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Sellers, in whole or
in part):
Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
Buyer's Performance.
All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 2.4 and must have made the
payments required to be made by Buyer pursuant to Sections 2.4(b)(i)
and 2.4(b)(ii).
Consents. Each of the Consents identified in Part 3.2 of the Disclosure
Letter must have been obtained and must be in full force and effect.
Additional Documents. Buyer must have caused
the following documents to be delivered to Sellers:
an opinion of legal counsel, dated the
Closing Date, in the form of Exhibit 8.4(a); and
such other documents as Sellers may reasonably request for the
purpose of (i) enabling their counsel to provide the opinion referred
to in Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of Buyer, (iii) evidencing the performance
by Buyer of, or the compliance by Buyer with, any covenant or
obligation required to be performed or complied with by Buyer, (iv)
evidencing the satisfaction of any condition referred to in this
Section 8, or (v) otherwise facilitating the consummation of any of the
Contemplated Transactions.
No Injunction. There must not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the sale of the Shares by Sellers
to Buyer, and (b) has been adopted or issued, or has otherwise become effective,
since the date of this Agreement.
TERMINATION.
Termination Events. This Agreement may, by
notice given prior to or at the Closing, be terminated:
by either Buyer or Sellers if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(i) by Buyer if any of the conditions in Section 7 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer
has not waived such condition on or before the Closing Date; or (ii) by
Sellers, if any of the conditions in Section 8 has not been satisfied
of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Sellers to comply
with their obligations under this Agreement) and Sellers have not
waived such condition on or before the Closing Date;
by mutual consent of Buyer and
Sellers; or
by either Buyer or Sellers if the Closing has not occurred
(other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on
or before September 30, 2005, or such later date as the parties may
agree upon.
Effect of Termination. Each party's right of termination under Section
9.1 is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 9.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in Sections 11.1 and 11.3 will survive; provided, however, that if
this Agreement is terminated by a party because of the Breach of the Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
INDEMNIFICATION; REMEDIES.
Survival; Right to Indemnification not Affected by Knowledge. All
representations, warranties, covenants, and obligations in this Agreement, the
Disclosure Letter, the supplements to the Disclosure Letter, the certificate
delivered pursuant to Section 2.4(a)(v), and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
Indemnification and Payment of Damages by Sellers. Sellers, jointly and
severally, will indemnify and hold harmless Buyer, the Acquired Company, and
their respective Representatives, shareholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage (including
incidental and consequential damages), expense (including costs of investigation
and defense and reasonable attorneys' fees) or diminution of value, whether or
not involving a third-party claim (collectively, "Damages"), arising, directly
or indirectly, from or in connection with:
any Breach of any representation or warranty made by Sellers
in this Agreement (without giving effect to any supplement to the
Disclosure Letter), the Disclosure Letter, the supplements to the
Disclosure Letter, or any other certificate or document delivered by
Sellers pursuant to this Agreement;
any Breach of any representation or warranty made by Sellers
in this Agreement as if such representation or warranty were made on
and as of the Closing Date without giving effect to any supplement to
the Disclosure Letter, other than any such Breach that is disclosed in
a supplement to the Disclosure Letter and is expressly identified in
the certificate delivered pursuant to Section 2.4(a)(v) as having
caused the condition specified in Section 7.1 not to be satisfied;
any Breach by either Seller of any
covenant or obligation of such Seller in this
Agreement;
any product shipped or manufactured
by, or any services provided by, the Acquired
Company prior to the Closing Date;
any matter addressed in the Disclosure
Letter; or
any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with either
Seller or the Acquired Company (or any Person acting on their behalf)
in connection with any of the Contemplated Transactions.
The remedies provided in this Section 10.2 will not be exclusive of or limit any
other remedies that may be available to Buyer or the other Indemnified Persons.
Indemnification and Payment of Damages by Sellers; Environmental
Matters. In addition to the provisions of Section 10.2, Sellers, jointly and
severally, will indemnify and hold harmless Buyer, the Acquired Company, and the
other Indemnified Persons for, and will pay to Buyer, the Acquired Company, and
the other Indemnified Persons the amount of, any Damages (including costs of
cleanup, containment, or other remediation) arising, directly or indirectly,
from or in connection with:
any Environmental, Health, and Safety Liabilities arising out
of or relating to: (i) (A) the ownership, operation, or condition at
any time on or prior to the Closing Date of the Facilities or any other
properties and assets (whether real, personal, or mixed and whether
tangible or intangible) in which Sellers or the Acquired Company has or
had an interest, or (B) any Hazardous Materials or other contaminants
that were present on the Facilities or such other properties and assets
at any time on or prior to the Closing Date; or (ii) (A) any Hazardous
Materials or other contaminants, wherever located, that were, or were
allegedly, generated, transported, stored, treated, Released, or
otherwise handled by Sellers or the Acquired Company or by any other
Person for whose conduct they are or may be held responsible at any
time on or prior to the Closing Date, or (B) any Hazardous Activities
that were, or were allegedly, conducted by Sellers or the Acquired
Company or by any other Person for whose conduct they are or may be
held responsible; or
any bodily injury (including illness, disability, and death,
and regardless of when any such bodily injury occurred, was incurred,
or manifested itself), personal injury, property damage (including
trespass, nuisance, wrongful eviction, and deprivation of the use of
real property), or other damage of or to any Person, including any
employee or former employee of Sellers or the Acquired Company or any
other Person for whose conduct they are or may be held responsible, in
any way arising from or allegedly arising from any Hazardous Activity
conducted or allegedly conducted with respect to the Facilities or the
operation of the Acquired Company prior to the Closing Date, or from
Hazardous Material that was (i) present or suspected to be present on
or before the Closing Date on or at the Facilities (or present or
suspected to be present on any other property, if such Hazardous
Material emanated or allegedly emanated from any of the Facilities and
was present or suspected to be present on any of the Facilities on or
prior to the Closing Date) or (ii) Released or allegedly Released by
Sellers or the Acquired Company or any other Person for whose conduct
they are or may be held responsible, at any time on or prior to the
Closing Date.
Buyer will be entitled to control any Cleanup, any related Proceeding, and,
except as provided in the following sentence, any other Proceeding with respect
to which indemnity may be sought under this Section 10.3. The procedure
described in Section 10.9 will apply to any claim solely for monetary damages
relating to a matter covered by this Section 10.3.
Indemnification and Payment of Damages by Buyer. Buyer will indemnify
and hold harmless Sellers, and will pay to Sellers the amount of any Damages
arising, directly or indirectly, from or in connection with (a) any Breach of
any representation or warranty made by Buyer in this Agreement or in any
certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions.
Time Limitations. If the Closing occurs, Sellers will have no liability
(for indemnification or otherwise) with respect to any representation or
warranty, or covenant or obligation to be performed and complied with prior to
the Closing Date, other than those in Sections 3.3, 3.11, 3.13, and 3.19, unless
on or before December 31, 2005, Buyer notifies Sellers of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by
Buyer; a claim with respect to Section 3.3, 3.11, 3.13, or 3.19, or a claim for
indemnification or reimbursement not based upon any representation or warranty
or any covenant or obligation to be performed and complied with prior to the
Closing Date, may be made at any time. If the Closing occurs, Buyer will have no
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the Closing Date, unless on or before December 31, 2005 Sellers notify Buyer
of a claim specifying the factual basis of that claim in reasonable detail to
the extent then known by Sellers.
Limitations on Amount--Sellers. Sellers will have no liability (for
indemnification or otherwise) with respect to the matters described in clause
(a), clause (b) or, to the extent relating to any failure to perform or comply
prior to the Closing Date, clause (c) of Section 10.2 until the total of all
Damages with respect to such matters exceeds Ten Thousand US Dollars
($10,000.00), and then only for the amount by which such Damages exceed Ten
Thousand US Dollars ($10,000.00). Sellers will have no liability (for
indemnification or otherwise) with respect to the matters described in clause
(d) of Section 10.2 until the total of all Damages with respect to such matters
exceeds Ten Thousand US Dollars ($10,000.00), and then only for the amount by
which such Damages exceed Ten Thousand US Dollars ($10,000.00). However, this
Section 10.6 will not apply to any Breach of any of Sellers' representations and
warranties of which either Seller had Knowledge at any time prior to the date on
which such representation and warranty is made or any intentional Breach by
either Seller of any covenant or obligation, and Sellers will be jointly and
severally liable for all Damages with respect to such Breaches.
Limitations on Amount--Buyer. Buyer will have no liability (for
indemnification or otherwise) with respect to the matters described in clause
(a) or (b) of Section 10.4 until the total of all Damages with respect to such
matters exceeds Ten Thousand US Dollars ($10,000.00), and then only for the
amount by which such Damages exceed Ten Thousand US Dollars ($10,000.00).
However, this Section 10.7 will not apply to any Breach of any of Buyer's
representations and warranties of which Buyer had Knowledge at any time prior to
the date on which such representation and warranty is made or any intentional
Breach by Buyer of any covenant or obligation, and Buyer will be liable for all
Damages with respect to such Breaches.
Right of Set-off. Upon notice to Sellers specifying in reasonable
detail the basis for such set-off, Buyer may set off any amount to which it may
be entitled under this Section 10 against amounts otherwise payable or may give
notice of a Claim in such amount, if any. The exercise of such right of set-off
by Buyer in good faith, whether or not ultimately determined to be justified,
will not constitute a breach of contract. Neither the exercise of nor the
failure to exercise such right of set-off or to give a notice of a Claim, if
any, will constitute an election of remedies or limit Buyer in any manner in the
enforcement of any other remedies that may be available to it.
Procedure for Indemnification--Third Party
Claims.
Promptly after receipt by an indemnified party under Section
10.2, 10.4, or (to the extent provided in the last sentence of Section
10.3) Section 10.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the failure
to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
If any Proceeding referred to in Section 10.9(a) is brought
against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party
will, unless the claim involves Taxes, be entitled to participate in
such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation
would be inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such Proceeding, the indemnifying party will not, as
long as it diligently conducts such defense, be liable to the
indemnified party under this Section 10 for any fees of other counsel
or any other expenses with respect to the defense of such Proceeding,
in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable
costs of investigation. If the indemnifying party assumes the defense
of a Proceeding, (i) it will be conclusively established for purposes
of this Agreement that the claims made in that Proceeding are within
the scope of and subject to indemnification; (ii) no compromise or
settlement of such claims may be effected by the indemnifying party
without the indemnified party's consent unless (A) there is no finding
or admission of any violation of Legal Requirements or any violation of
the rights of any Person and no effect on any other claims that may be
made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and
(iii) the indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its consent.
If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten days after
the indemnified party's notice is given, give notice to the indemnified
party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the indemnified
party.
Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
Sellers hereby consent to the non-exclusive jurisdiction of
any court in which a Proceeding is brought against any Indemnified
Person for purposes of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on Sellers with
respect to such a claim anywhere in the world.
Procedure for Indemnification--Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
GENERAL PROVISIONS.
Expenses. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. Sellers will cause the Acquired
Company not to incur any out-of-pocket expenses in connection with this
Agreement. In the event of termination of this Agreement, the obligation of each
party to pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party.
Public Announcements. Any public announcement or similar publicity with
respect to this Agreement or the Contemplated Transactions will be issued, if at
all, at such time and in such manner as Buyer determines. Unless consented to by
Buyer in advance or required by Legal Requirements, prior to the Closing Sellers
shall, and shall cause the Acquired Company to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
Sellers and Buyer will consult with each other concerning the means by which the
Acquired Company's employees, customers, and suppliers and others having
dealings with the Acquired Company will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any such
communication.
Confidentiality. Between the date of this Agreement and the Closing
Date, Buyer and Sellers will maintain in confidence, and will cause the
directors, participants, officers, employees, agents, and advisors of Buyer and
the Acquired Company to maintain in confidence, any written, oral, or other
information obtained from another party or the Acquired Company in connection
with this Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (b) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions, or (c) the furnishing or use of
such information is required by legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.
Notices. All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Jurisdiction; Service of Process. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against any of the parties in the courts of the State of New
York, County of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
Disclosure Letter.
The disclosures in the Disclosure Letter, and those in any
Supplement thereto, must relate only to the representations and
warranties in the Section of the Agreement to which they expressly
relate and not to any other representation or warranty in this
Agreement.
In the event of any inconsistency between the statements in
the body of this Agreement and those in the Disclosure Letter (other
than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty),
the statements in the body of this Agreement will control.
Assignments, Successors and No Third Party Rights. Neither party may
assign any of its rights under this Agreement without the prior consent of the
other parties, which will not be unreasonably withheld. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
Time of Essence. With regard to all dates and
time periods set forth or referred to in this Agreement,
time is of the essence.
Governing Law. This Agreement will be governed
by the laws of the State of New York, USA without regard
to conflicts of laws principles.
Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. This Agreement has been prepared in English and
Armenian. All documents, notices, waivers and all other communication written or
otherwise between the parties hereto in connection with this Agreement shall be
in English. This Agreement shall also be translated into and executed in
Armenian. If there is any inconsistency betweeen the versions, English version
shall prevail.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
Signed for and on behalf Signed for and on behalf
of the Sellers of the Buyers
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Xxxxxxx Xxxxxxxxxxx Xxx Xxxxxxxxx
Manager
Global Gold Mining, LLC
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Xxxxxx Xxxxxxxxx
