Exhibit 10.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of October 18, 2002, is made by
and between El Capitan Precious Metals, Inc., a Delaware corporation ("Buyer"),
and Gold and Minerals, Inc., a Nevada corporation ("G&M"), and El Capitan, Ltd.,
an Arizona corporation ("El Capitan") (individually, a "Seller". and
collectively, the "Sellers"). Buyer and Sellers are sometimes referred to
individually as a "Party" and collectively as the "Parties."
WITNESSETH
A. Sellers own or control certain patented and unpatented mining claims and
mall sites and fee lands in Lincoln County, New Mexico (the "Claims"). The
Claims owned by Sellers are more particularly described in Part I of Exhibit A
to this Agreement. A portion of the Claims, as well as certain fee lands, are
leased by El Capitan pursuant to certain mining leases (the "Leases") which are
more particularly described in Part II of Exhibit A to this Agreement.
X. Xxxxxxx have entered into certain contracts and agreements (the
"Contracts") related to the Claims and have constructed or otherwise acquired
certain mines, dumps, roads, buildings, fixtures, facilities and other
improvements on a portion of the Claims (The "Fixtures and Improvements"), have
purchased, leased of otherwise acquired rights to possess and use certain
machinery, equipment and materials and supplies (the "Machinery and Equipment"),
have acquired certain water rights (the "Water Rights") and certain operational
permits, and other ancillary rights (the "Related Rights"), and have developed
certain data, maps, cores, analyses, models, studies and other technical
information (the "Information") in connection with Sellers, exploration and
mining activities on the Claims. The Contracts are identified in Part III of
Exhibit A to this Agreement, the Machinery and Equipment are identified in Part
IV of Exhibit A to this Agreement, the Fixtures and Improvements are identified
in Part V of Exhibit A to this Agreement, the Water Rights, the Related Rights
and the Information are identified in Part VI of Exhibit A to this Agreement.
The Claims, the Leases, the Contracts, the Fixtures and Improvements, the
Machinery and Equipment, the Water Rights, the Related Rights and the
Information are hereinafter collectively referred to as the Properties.
C. Buyer desires to purchase from Sellers a 40% undivided interest, as
co-tenant with Sellers, in all of the Properties (said 40% undivided interest to
be acquired by Buyer is sometimes referred to hereinafter as the "Acquired
Assets").
D. This Agreement contemplates a transaction in which: Sellers will convey
to Buyer the Acquired Assets in exchange for cash and shares of Buyer, and will
agree to enter into a Mining Operations Agreement with Buyer for the further
development of the Claims.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, warranties, representations and conditions contained in this
Agreement, it is hereby agreed as follows:
1. DEFINITIONS AND CROSS-REFERENCES
1.1 Definitions. The terms defined in Exhibit D and elsewhere shall have the
defined meaning wherever used in this Agreement, including in Exhibits.
1.2 Cross Reference. References to "Exhibits," "Articles," "Sections" and
"Subsections" refer to Exhibits, Articles, Sections and Subsections of this
Agreement, References to "Paragraphs" and "Subparagraphs" refer to paragraphs
and subparagraphs of the referenced Exhibits.
2. SALE AND PURCHASE OF ASSETS
2.1 Acquired Assets. On the terms and subject to the conditions contained
herein, Sellers agree to sell to Buyer and Buyer agrees to purchase from Seller
as of the date hereof, free and clear of all liens, claims and encumbrances, a
forty percent (40%) undivided interest, as co-tenant, of all Seller's right,
title and interest in and to the Properties.
2.2 Names Following the Closing. Immediately following the Closing, El Capitan,
Ltd. shall amend its certificate or articles of incorporation so as to change
its name to a name which is not, in the judgment of Buyer acting reasonably,
confusingly similar to the Buyer's name and Seller shall not thereafter use such
name or other names acquired by Buyer hereunder or names confusingly similar
thereto.
3. PURCHASE PRICE: ALLOCATION
3.1 Purchase Price Payment. The Purchase Price ("Purchase Price") for the
Acquired Assets shall be: (a) 775 shares of the common stock, $.01 par value of
Buyer, which will constitute 77.5% of the equity ownership of Buyer on a fully
diluted basis (the "Shares"); and (b) $100,000 in cash (the "Cash Purchase
Price"), will be delivered as follows:
3.1.1 At the Closing, the deposit of $17,500.00 heretofore made by
Buyer which shall be applied to the Purchase Price. The remaining
balance of the Cash Purchase Price of $87,500.00 (being $100,000.00
less the amount of $17,500.00) will be paid in installments in the
amounts and on the dates set forth on Schedule 3.1 hereto; and
3.1.2 At the Closing, Buyer will deliver a certificate representing
the Shares, bearing appropriate restrictive legends.
3.2 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Acquired Assets as set forth on Exhibit C attached hereto. The parties
agree that the allocation set forth in Exhibit B attached hereto shall be used
by them and respected for all purposes, including income tax purposes, and that
the parties shall follow such allocation for all reporting purposes.
3.3 Deliveries at the Closing. At the Closing: (i) Sellers and Buyer will
execute and deliver this Agreement; (ii) Sellers will execute, acknowledge (if
appropriate), and deliver to Buyer instruments of sale, transfer, assignment and
conveyance in the forms attached hereto as Exhibits C-1 and C-2 and relinquish
complete possession of the Purchased Claims to Buyer, (iii), (iv) Sellers shall
deliver to Buyer and Buyer shall deliver to Sellers their respective opinions of
counsel, dated as the Closing Date, in form and substance as set forth in
Exhibits F and G, respectively; (v) Sellers will provide evidence that all third
party consents required t permit the transfer of the Purchased Claims have been
received; and (vi) Buyer will deliver to the Seller the consideration specified
in Section 3.1(a) and 3.1(b), including without limitation a definitive
certificate representing the Purchased Shares duly registered in the name of
Sellers above.
3.4 Further Assurances. If at any time after the date hereof Buyer shall
consider or be advised that any further assignments of assurances in law or any
other acts are necessary, desirable or proper (i) otherwise carry out the
purposes of this Agreement, Seller agrees that it shall execute and deliver all
such assignments and assurances in law and do all acts reasonably necessary,
desirable or proper to vest, perfect and confirm title to such Acquired Assets
in Buyer, and otherwise to carry out the purposes of this Agreement.
3.5 Liabilities of Sellers Not Assumed. Buyer shall not assume, or in any
way become liable for, any liabilities or obligations of Seller of any kind of
nature, whether accrued, absolute, contingent or otherwise, or whether due or to
become due, or otherwise, whether known or unknown, arising out of events,
transactions or facts which shall have occurred, arisen o existed on or prior to
the date hereof, which liabilities and obligations, if ever in existence, shall
continue to be liabilities or obligations of Seller. Specifically, but without
limiting the foregoing, Buyer shall not assume or be liable for the following
debts, liabilities and obligations (the "Excluded Liabilities"):
3.5.1 Violation of Representations, Etc. Debts, obligations or
liabilities which arise or exist in violation of any of the
representations, warranties, covenants or agreements of Seller
contained in this Agreement or in any statement or certificate
delivered to Buyer by or on behalf of Seller on or before the date
hereof pursuant to this Agreement or in connection with the
transactions contemplated hereby.
3.5.2 Undisclosed Liabilities. Debts, obligations or liabilities of
any kind or nature, whether absolute, accrued, contingent or
otherwise, required by this Agreement to be disclosed to Buyer, if
not so disclosed in writing and specifically assumed in writing by
Buyer.
3.5.3 Contingent Liabilities. Contingent liabilities of Seller of
any kind arising or existing on or prior to the date hereof,
including, but not limited to, claims proceedings or causes or
action which are currently or hereafter become, the subject of
claims, assertions, litigation or arbitration.
3.5.4 Taxes Due on Sale. Debts, obligations or liabilities of Seller
for federal, state, county, local, foreign or other income, sales,
use or transfer taxes or assessments (including interest and
penalties thereon, if any) of any kind whatsoever arising from,
based upon or related to the sale, transfer or deliver of the
Acquired Assets pursuant to this Agreement.
3.5.5 Other Taxes. Debts, obligations or liabilities of Seller,
whether absolute, accrued, continent or otherwise, for (i) federal
and state income taxes; (ii) all taxes relating to any real
property, (iii) all franchise taxes of Seller, (including interest
and penalties thereon, if any); and (iv) any other taxes of Seller.
3.5.6 Pension and Other Employee Plans. Debts, obligations or
liabilities under any pension, profit sharing, savings, retirement,
health, medical, life, disability, dental, deferred compensation,
stock option, bonus, incentive, severance pay, group insurance or
other similar employee plans or arrangements, or under any policies,
handbooks, or custom or practice, collective bargaining agreement,
or any employment agreements, whether express or implied, applicable
to any of Seller's employees at any time through and including the
date hereof.
3.5.7 Personal Injury, Products Liability and Recall Claims. Debts,
expenses, obligations or liabilities of Seller arising out of any
claim for personal injury (including worker's compensation or
otherwise), property damage, product recall, product liability or
strict liability, arising from events (including the shipment of
goods) occurring on or prior to the date hereof (whether or not such
claim is then asserted).
3.5.8 Environmental Matters. Any debts, expenses, obligations or
liabilities arising out of claims alleging damage to the environment
or similar claims with respect to the conduct of the Business or the
ownership or lease by Seller of the Claims on or before the date
hereof.
3.5.9 Infringements. Any liability or obligation of Seller arising
out of any wrongful or unlawful violation or infringement of any
Proprietary Right of any person or entity occurring on or prior to
the date hereof.
3.5.10 Indebtedness: Intercompany Obligations. Any liabilities or
obligations in respect of the borrowing of money or issuance of any
note, bond, indenture, loan, credit agreement or other evidence of
indebtedness or direct or indirect guaranty or assumption of
indebtedness, liabilities or obligations of others, whether or not
disclosed in this Agreement or otherwise ("Indebtedness") of
Sellers, including, without limitation, any intercompany obligations
or liabilities of Seller.
3.5.11 Litigation. Debts, expenses, obligations or liabilities of
Seller arising out of any claim, action, suit or proceeding pending
as of the date hereof or arising out of or relating to matters or
events occurring on or prior to the date hereof.
3.5.12 Executed Assets. Any liabilities or obligations arising out
of or relating to the Excluded Assets.
4. REPRESENTATIONS AND WARRANTIES; TITLE TO ASSETS; INDEMNITITES
4.1 Representations and Warranties of Both Parties. As of the Effective
Date, each Party warrants and represents to the other that:
4.1.1 It is a corporation duly organized and in good standing in its
state of incorporation and is qualified to do business and is in
good standing in those states where necessary in order to carry out
the purposes of this Agreement;
4.1.2 it has the capacity to enter into and perform this Agreement
and all transactions contemplated herein and that all corporate
board of directors, shareholder, surface and mineral rights owner,
lessor, lessee and other actions required to authorize it to enter
into and perform this Agreement have been properly taken;
4.1.3 it will not breach any other agreement or arrangement by
entering into or performing this Agreement;
4.1.4 it does not have any Liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
transaction contemplated by this Agreement for which the other Party
could become liable or obligated;
4.1.5 it is not subject to any governmental order, judgment, decree,
debarment, sanction or Laws that would preclude the permitting or
implementation or Operations under this Agreement; and
4.1.6 this Agreement has been duly executed and delivered by it and
is valid and binding upon it in accordance with its terms.
4.2 Representations and Warranties of Sellers. As of the Effective Date,
Sellers jointly and severally make the following representations and warranties
to Buyer:
4.2.1 With respect to the Claims identified in Exhibit A as fee
properties, one or more Sellers is legally entitled to hold the
properties, holds the record title to the properties, is in
exclusive possession of and owns such Claims free and clear of all
encumbrances or defects in title (including liens arising under
Environmental Laws) except those specifically identified in
Paragraph 1.1 of Exhibit A, and Sellers have acquired all necessary
surface and subsurface rights in respect of or related to the
Claims, the Properties and the Operations.
4.2.2 With respect to those Claims identified in Exhibit A as
Properties in which Sellers hold an interest under leases or other
contracts: (i) one or more Sellers is legally entitled to lease the
Properties, holds record title to the leases and contracts and is in
exclusive possession of such Claims; (ii) such Seller has not
received any notice of default of any of the terms or provisions of
such leases of other contracts; (iii) Sellers have the authority
under such leases or other contracts to perform fully its
obligations under this Agreement; (iv) to Sellers' knowledge, such
leases and other contracts are valid and are in good standing; (v)
Sellers have no knowledge of any act or omission or any condition on
the Properties which could be considered or construed as a default
under any such lease or other contract; and (vi) to Sellers'
knowledge, such Properties are free and clear of all Encumbrances or
defects in title (including liens arising under Environmental Laws)
except for those specifically identified in Paragraph 1.1 of Exhibit
A.
4.2.3 Sellers have delivered to or made available for inspection by
Buyer all Existing Data in their possession or control, and true and
correct copies of all leases or other contracts relating to the
Properties.
4.2.4 With respect to unpatented mining claims and millaites located
by Sellers that are included within the Claims, subject to the
paramount title of the United States: (i) the unpatented mining
claims were properly laid out and monumented; (ii)all required
location and validation work was properly performed; (iii) location
notices and certificates were properly recorded and filed with
appropriate governmental agencies; (iv) all assessment work required
to hold the unpatented mining claims has been performed and all
Governmental Fees have been paid through the assessment year ending
September 1, 2002; (v) all affidavits of assessment work, evidence
of payment of Governmental Fees, and other filings required to
maintain the claims in good standing have been properly and timely
recorded or filed with appropriate governmental agencies; (vi) the
claims are free and clear of Encumbrances or deficits in title; and
(vii) Sellers have no knowledge of conflicting mining claims or the
presence of third party mineral entries. One of the Sellers holds
record title to each unpatented mining claim included within the
Claims and each such Claim is free and clear of all material
defects, liens and encumbrances (including liens arising under
Environmental Laws), arising by, through, or under the Sellers and
free and clear of other material defects, liens and encumbrances of
which any Seller has Knowledge. Nothing in this Subsection, however,
shall be deemed to be a representation or a warranty that any of the
unpatented mining claims contains a valuable mineral deposit.
4.2.5 With respect to unpatented mining claims and millsites not
located by Sellers buy which are included within the Properties,
subject to the paramount title of the United States: (i) all
assessment work required to hold the unpatented mining claims has
been performed and all Governmental Fees have been paid in a manner
consistent with that required of the Manager pursuant to Subsection
8.2(k) through the assessment year ending September 1, 2002; (ii)
all affidavits of assessment work, evidence of payment of
Governmental Fees, and other filings required to maintain the claims
in good standing have been properly and timely recorded or filed
with appropriate governmental agencies; (iii) the claims are free
and clear of Encumbrances or defects in title; and (iv) Sellers have
no knowledge of conflicting mining claims. Nothing in this
Subsection, however, shall be deemed to be a representation or a
warranty that any of the unpatented mining claims contains a
valuable discovery of minerals.
4.2.6 Sellers have made available or delivered to Buyer or its
counsel or consultants all information concerning title to the
Claims in Seller's possession or control, of which Sellers have
Knowledge.
4.2.7 Sellers own all of the Machinery and Equipment. Fixtures and
Improvements, and Information free and clear of all material
defects, liens and encumbrances (including liens arising under
Environmental Laws). The tangible properties and assets of Seller
that are included in the Machinery and Equipment, Fixtures and
Improvements, and Information (including all buildings) are in good
operating conditions and repair, ordinary wear and tear excepted.
4.2.8 All of the Contracts and leases to which any Seller is a party
which relate to, affect, touch or concern the Property are
identified in Exhibit A to this Agreement. All of the Related Rights
and Water Rights owned or held by Sellers are listed in Part VI of
Exhibit A hereto. Sellers have delivered or made available to Buyer
a correct and complete copy of each written agreement or document
identified in Exhibit A. With respect to each such agreement or
document (except that no representation is made as to the remedy of
specific performance or other equitable remedies for the enforcement
of any such agreement that this representation is limited by
applicable bankruptcy, insolvency, moratorium and other similar laws
affecting generally the right of creditors and secured parties): (A)
the agreement or document is legal, valid, binding, enforceable, and
in full force and effect; (B) the agreement or document will
continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and
assumptions referred to in Section 3 above); (C) no Seller is in
breach or default and, to Sellers' Knowledge, no other party is in
breach or default and no event has occurred which with notice of
lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement or
document; and (D) no party has repudiated any provision of the
agreement or document.
4.2.9 El Capitan, Ltd. is a wholly owned, direct subsidiary of Gold
and Minerals, Inc.
4.2.10 With respect to the Properties, to Sellers' knowledge, there
are no pending or threatened actions, suits, claims or proceedings,
and there have been no previous transactions affecting its interests
in the Properties which have not been for fair consideration.
4.2.11 Employment, Labor and Other Relations.
4.2.11.1 Seller is not a party to or is otherwise bound by any
contract, agreement or collective bargaining agreement with any
labor union or organization or other commitment respecting
employment or compensation of any of their respective officers,
directors, agents or employees, and no employees of Seller are
represented by any labor union or similar organization.
4.2.11.2 There are no charges or complaints involving any federal,
state or local civil rights enforcement agency or court; complaints
or citations under the Occupational Safety and Health Act or any
state or local occupational safety act or regulation; unfair labor
practice charges or complaints with the National Labor Relations
Board; or other claims, charges, actions or controversies pending,
or, to the knowledge of Seller, threatened or proposed, involving
Seller and any employee, former employee or any labor union or other
organization representing or claiming to represent such employee's
interest, which could materially and adversely affect the business
of Seller.
4.2.11.3 Seller is and has heretofore been in compliance in all
material respects with all laws, rules and regulations respecting
employment and employment practices, terms and conditions of
employment and wages and hours, the sponsorship, maintenance,
administration and operation of (or the participation of its
employees in) employee benefit plans and arrangements and
occupational safety and health programs, and Seller is not engaged
in any violation of any law, rule or regulation related to
employment, including unfair labor practices or acts of employment
discrimination, which could materially and adversely affect the
business of Seller.
4.2.12 Employee Benefits. As used herein, the term "Employee Plan"
includes any pension, retirement, savings, disability, medical,
dental, health, life (including any individual life insurance policy
to which Seller makes premium payments, whether or not Seller is the
owner, beneficiary or both of such policy), death benefit, group
insurance, profit sharing, deferred compensation, stock option,
bonus, incentive, vacation pay, severance pay, or other employee
benefit plan, trust, arrangement, contract, agreement, policy or
commitment (including without limitation, any pension plan ("Pension
Plan") as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any welfare plan as
defined in Section 3(1) of ERISA ("Welfare Plan"), whether any of
the foregoing is funded, insured or self-funded, written or oral.
With respect to the Employee Plans:
4.2.12.1 Seller has not at any time maintained, and does not
currently maintain, any Pension Plan which is subject to the minimum
funding requirements of IRC Section 412 or Section 302 of ERISA;
4.2.12.2 Seller does not maintain or contribute to, and has not
maintained or contributed to, an employee pension benefit plan
subject to the provisions of Title IV of ERISA. Seller does not and
has not had an obligation to contribute to any multiemployer plan
(within the meaning of Section 3(37) of ERISA). Each employee
benefit plan (within the meaning of Section 3(3) of ERISA)
maintained by, or contributed to, by the Seller has been
administered in compliance with its reporting and notice
requirements under 4980B of the Internal Revenue code of 1986, as
amended (the "code"). Neither Seller nor any of its officers or
directors ha engaged in any transaction in violation of the
prohibited transactions provisions set forth in Section 406 of
ERISA;
4.2.12.3 Seller has not made an oral or written representation to
its employees that Buyer will maintain any Employee Plan which is
similar or any way comparable to the Employee Plans maintained by
Seller.
4.2.13 Taxes. As used herein, the term "taxes" means all federal,
state, county, local and foreign income, excise, property, sales,
use, payroll, employee's income and social security withholding
intangibles, franchise, transfer and other taxes of whatever nature,
all penalties related to such taxes and interest on such taxes and
penalties, that relate to the Acquired Assets or could otherwise
affect or become a lien upon the Acquired Assets. Except as
previously disclosed to Buyer in writing, all Taxes due and payable
by the Seller with respect to all periods prior to and through the
date hereof have been duly and properly computed, reported, fully
paid and discharged and there are not unpaid Taxes, with respect to
any period prior to and through the date hereof, which are or could
become a lien on the Acquired Assets, except for current Taxes not
yet due and payable. There are no known or proposed penalty,
interest or deficiency assessments with respect to Taxes of the
Seller that require payment by, relate to or could materially
adversely affect the Seller or the Acquired Assets. Seller has not
waived any law or regulation fixing, or consented to the extension
of, any period of time for the assessment of any Taxes, which waiver
or consent is currently in effect.
4.2.14 Patents, Trademarks and Licenses. Seller owns, possesses or
has licenses or similar rights to utilize all patents, trademarks,
trade names, service marks, franchises, and technology necessary for
the conduct of its business as presently conducted without any
infringements of or conflict with the rights of others. All such
patents, trademarks, trade names, service marks and franchises, or
applications therefore, and all licenses for any of the foregoing,
are disclosed in Part VII of Exhibit A attached hereto. Neither the
consummation of the transactions contemplated by this Agreement will
terminate or alter Buyer's ability to utilize the above described
rights or the terms of such use.
4.2.15 Transactions With Affiliates. There are no contracts or
arrangements (formal or informal, written or oral), directly or
indirectly, between Seller, on the one hand, and any other persons
controlling under common control with or controlled by Seller, on the
other hand.
4.2.16 Except as to matters otherwise disclosed in writing to Buyer prior
to the Effective Date:
4.2.16.1 to Sellers' knowledge, the conditions existing on or with
respect to the Properties and its ownership and operation of the
Properties are not in violation of any Laws (including without
limitation any Environmental Damage, as defined below) or impairment
to the health, safety, or enjoyment of any persons at or on the
Properties or in the general vicinity of the Properties;
4.2.16.2 to Sellers' knowledge, there have been no past violations
by it or by any of its predecessors in title of any Environmental
Laws or other Laws affecting or pertaining to the Properties, nor
any past creation of damage or threatened damage to the air, soil,
surface waters, groundwater, flora, fauna, or other natural
resources on, about or in the general vicinity of the Properties
("Environmental Damage");
4.2.16.3 Sellers have not received inquiry from or notice of a
pending investigation from any governmental agency or of any administrative or
judicial proceeding concerning the violation of any Laws;
4.2.16.4 Sellers have secured all necessary permits or other
governmental or regulatory approvals in respect of the conduct of the Operations
and all such permits and approvals are in good standing.
4.2.17 Private Placement Representations.
4.2.17.1 Buyer can bear economic risk of losing its entire
investment in the Purchased Shares and can afford to hold the Purchased Shares
for an indefinite period of time; and
4.2.17.2 Buyer is an Accredited Investor as defined in Rule 501(a)
of Regulation D of the Securities Act of 1933 (the "Securities Act").
4.2.17.3 Seller acknowledges that the Shares will not have been
registered under the Securities Act, and accordingly are "restricted
securities," within the meaning of Rule 144 under the Securities Act, and will
bear a restrictive legend to that effect.
4.2.18 Since the delivery of the Letter of Intent between the Parties
dated September 3, 2002, and the subsequent Letter dated September 20, 2002,
there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of Sellers.
The representations and warranties set forth above shall survive the execution
and delivery of any documents of Transfer provided under this Agreement. For a
representation or warranty made to a Party's "knowledge," the term "Knowledge"
shall mean actual knowledge on the part of the officers, employees, and agents
of the representing Party, upon due inquiry, or of facts that would reasonably
lead to the indicated conclusions.
4.3 Representations and Warranties of Buyer. As of the Effective Date,
Buyer makes the following representations and warranties to Seller:
4.3.1 Upon delivery at Closing, the Purchased Shares will be duly
authorized, validly issued, fully paid and non-assessable, and will be
free and clear of any security interest or restriction on transfer (other
than those arising under the Securities Act of 1933, as amended, or
comparable state laws). Upon delivery at Closing, title to the Purchased
Shares shall be vested exclusively, legally and beneficially in Buyer. At
Closing, the aggregate Purchased Shares shall constitute 77.5% of all then
outstanding shares of Buyer, determined after giving effect to such share
issuance.
4.4 Disclosures. Each of the Parties represents and warrants that it is
unaware of any material facts or circumstances that have not been disclosed in
this Agreement, which should be disclosed to the other Party in order to present
the representations and warranties in this Article from being materially
misleading. Sellers have disclosed to Buyer all information it believes to be
relevant concerning the Assets and has provided to or made available for
inspection by Buyer all such information, but does not make any representation
or warranty, express or implied, as to the accuracy or completeness of the
information (except as provided in Section 3.2) or as to the boundaries or value
of the Assets. Each Party represents to the other that in negotiating and
entering into this Agreement it has relied solely on its own appraisals and
estimates as to the value of the Assets and upon its own geologic and
engineering interpretations related thereto.
4.5 Record Title. Record title to the Acquired Assets shall be held by
Buyer as co-tenant with Sellers' in proportion to their respective interests in
the Properties.
4.6 Indemnities/Limitations of Liability.
4.6.1 Each Party shall indemnify the other Party, its directors, officers,
employees, agents and attorneys, or Affiliates (collectively "Indemnified
Party") from and against the entire amount of any Material Loss. A
"Material Loss" shall mean all costs, expenses, damages or liabilities,
including attorneys' fees and other costs of litigation (either threatened
or pending) arising out of or based on a breach by a Party ("Indemnifying
Party") of (i) any representation, warranty or covenant contained in this
Agreement; (ii) any fees, expenses or other payments incurred or owed by a
Party to any brokers or comparable third parties retained or employed by
it in connection with the transactions contemplated by the Agreement; or
(iv) any claim made by a third party alleging facts, which, if true, would
entitle a Party to indemnification pursuant to the above.
4.6.2 If any claim or demand is asserted against an Indemnified Party in
respect of which such Indemnified Party may be entitled to indemnification
under this Agreement, written notice of such claim or demand shall
promptly be given to the Indemnifying Party. The Indemnifying Party shall
have the right, but not the obligation, by notifying the Indemnified Party
within thirty (30) days after its receipt of the notice of the claim or
demand, to assume the entire control of (subject to the right of the
Indemnified Party to participate, at the Indemnified Party's expense and
with counsel of the Indemnified Party's choice. Any damages to the assets
or business of the Indemnified Party caused by a failure by the
Indemnifying Party to defend, compromise, or settle a claim or demand in a
reasonable and expeditious manner required by the Indemnified Party, after
the Indemnifying Party has given notice that it will assume control of the
defense, compromise, or settlement of the matter, shall be included in the
damages for which the Indemnifying Party shall be obligated to indemnify
the Indemnified Party. Any settlement or compromise of a matter by the
Indemnifying Party shall include a full release of claims against the
Indemnified Party which has arisen out
5. COVENANTS.
5.1 Conduct of Business. Sellers covenant and agree with Buyer that from
the date hereof until the Closing or termination of this Agreement, unless
otherwise consented to in writing by Buyer:
5.1.1 Operation of Properties; No Material Change. The Sellers will
operate and conduct their business on and with respect to the Properties and the
Acquired Assets only in the ordinary course and, without limiting the foregoing,
will:
5.1.1.1 Not make any change in their business or operations;
5.1.1.2 Not sell, pledge, lease, mortgage, encumber or
otherwise dispose of (except with the prior written consent of Buyer) any of the
Properties;
5.1.1.3 Maintain that portion of the Properties consisting of
tangible assets in as good a state of operating condition and repair as they are
on the date hereof, except for ordinary depreciation and wear and tear;
5.1.1.4 Not borrow money, and not accelerate the payment of
any mortgage or any other obligation or commitment of Sellers relating to the
Properties;
5.1.1.5 Keep in force all policies of insurance covering the
Properties and, if Buyer so requests in writing, use their reasonable efforts to
secure, at the expense of Buyer, additional insurance from an insurance carrier,
in an amount on terms and to become effective upon a date on or within a
reasonable period after the Closing Date as shall be satisfactory to Buyer;
5.1.1.6 Not make or agree to make any distribution of cash or
other assets to the holders of Capital Stock of Sellers, or any employees,
agents, family members, affiliates or associates of such personas, by way of
loans, advances, dividends or otherwise, except for any normal monthly salaries
(at the rate in effect on the date hereof) of any such persons who are also
employees of the Properties, and as otherwise expressly approved in advance and
in writing by Buyer;
5.1.1.7 Not enter into any contracts or commitments therefore
for the purchase or lese of equipment, supplies or inventories, or cause any of
the Properties to become obligated upon any other contracts involving, in the
aggregate, in excess of $25,000 without the prior written approval of Buyer,
which approval will not be unreasonably withheld;
5.1.1.8 Not acquire or agree to acquire (through redemption or
otherwise) any of the outstanding securities of any of the Sellers, incur or
agree to incur any obligations to issue securities nor issue, sell or dispose of
any of their respective securities or options or rights convertible into their
respective securities or stock appreciation or similar rights;
5.1.1.9 Except with the written consent of Buyer, which will
not be unreasonably withheld, not authorize or pay or agree to pay or accrue any
wage, salary or other increase in remuneration of any of the Sellers, directors,
officers or other employees or agents, not authorize or make any changes in
compensation or policy regarding compensation payable or to become payable to
any directors, officers or other employees, and not hire any new employees or
elect any new officers or directors of Sellers;
5.1.1.10 Not amend any of the Sellers' articles or
certificates of incorporation or by-laws;
5.1.1.11 Not pay or agree to pay any of the expenses of the
transactions contemplated by this Agreement (including legal fees, accounting
fees, investment banking fee, taxes or otherwise) out of the Properties.
5.2 Maintain Properties as Going Concern. The Sellers will preserve the
business organization relating to the Properties, and keep available the
services of the present officers, employees, and agents thereof and will use its
best efforts to preserve the goodwill of the suppliers, customers and others
having business relations with the Sellers or the Properties.
5.3 Investigation. The Sellers shall allow Buyer and their representatives
and persons or entities which may provide financing for buyer in connection with
the transactions contemplated hereby, at all reasonable times, full access
during normal business hours to all stores, warehouses, operations, machinery,
equipment, inventories, property, offices, books, contracts, commitments,
records and affairs of Sellers relating to the Properties and their business,
and reasonably access to third parties having business dealings with the
Sellers, for the purpose of familiarizing themselves with the operation and
conduct of all aspects of their business and for the purpose of reasonable
inspection, examination, audit, counting and copying, such access shall not
unreasonably interfere with the operation and conduct of the business or the
Properties.
5.4 Preserve Accuracy of Representation and Warranties. The Sellers will
refrain from taking any action which would render any representation and/or
warranty contained in this Agreement inaccurate at and as of the Closing Date,
except for any changes therein specified in, permitted or contemplated by this
Agreement.
5.5 No Solicitation. The Sellers and their affiliates will take no action,
directly or indirectly, to solicit indications of interest or offers for the
sale of the Properties (whether by sale of stock, assets, merger or otherwise)
to anyone other than Buyer, furnish information to others in that connection, or
enter into discussions with any person with respect thereto, and the Sellers
will instruct its investment bankers and other representatives to refrain from
doing any of the foregoing.
5.6 Supplements to Exhibits. From time to time prior to the Closing Date,
the Sellers will promptly supplement or amend any Schedules provided for in this
Agreement (i) if any matter arises hereafter which, if existing or occurring at
or prior to the date of this Agreement, would have been required to be set forth
or described in any such Schedule, or (ii) if it becomes necessary to correct
any information in any such Schedule which has become inaccurate; provided,
however, that no such supplement or amendment to any Schedule shall be
considered in determining satisfaction of the conditions set forth in Section
6.2.1 of this Agreement.
5.7 Consents. The Sellers shall prepare, submit and file, or cause to be
prepared, submitted and filed, all applications for approvals and actions as may
be required by applicable law with respect to the transactions contemplated by
this Agreement, and shall use their respective best efforts to obtain such
approvals and accomplish such results as expeditiously as possible. In addition,
they will use their best efforts to obtain all other approvals, consents and
authorizations which are conditions to the Closing, and they shall take all
other action as shall be reasonably necessary or appropriate in order to
effectuate the transactions provided for or contemplated herein. Notwithstanding
the foregoing, when used in connection with to obtaining of a consent, approval
or other act of an unaffiliated third party or governmental authority, "best
efforts" shall not require Sellers to commence litigation against or acquire
control of such third person or the assets or obligations requiring such
consent, and shall not require Sellers to accelerate the payment of any
indebtedness.
6. CONDITIONS TO CLOSING.
6.1 Mutual Conditions. The respective obligations of each party to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment at or prior to the closing of each of the following conditions:
6.1.1 No Suit. No suit, action or other proceeding or investigation shall
to the knowledge of any party hereto be threatened or pending before or by
any governmental agency or by any third party questioning the legality of
this Agreement or the consummation of the transactions contemplated hereby
in whole or in part.
6.1.2 Closing. The closing shall have occurred by ___________, 2002, or
such later date as may be agreed to by the Parties.
6.2 Conditions by Buyer's Obligations.
6.2.1 Representations and Warranties. All representations and warranties
made by the Sellers contained in this Agreement shall be true and correct
on the date hereof and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and each
of the Sellers shall have duly performed or complied with all of the
obligations to be performed or complied with by each of them under the
terms of this Agreement on or prior to Closing.
6.2.2 Consents and Approvals. All authorizations, consents, waivers,
approvals or other action required in connection with the execution,
delivery and performance of this Agreement by the Sellers, Buyer, and the
consummation by each of them of the transactions contemplated hereby,
shall have been obtained, and the Sellers and the Properties shall have
obtained any authorizations, consents, waivers, approvals or other action
required in connection with the execution, delivery and performance of
this Agreement to prevent a material breach or default under, or the
termination, modification or lapse of, any of the Contracts and any
comparable contracts entered into after the date hereof.
6.2.3 Investigation. Buyer shall be reasonably satisfied with the results
of its investigation of Seller and the Business, as provided in foregoing
Section 5.3, including without limitation the results of geology and
reserve report(s) with respect to the recovery and reserves of precious
metals in connection with the Properties Assets which are reasonably
satisfactory to it.
6.2.4 Mining Operations Agreement. Sellers shall have executed and
delivered to Buyer the Mining Operations Agreement with respect to the
Operation of the Properties in the form attached as Exhibit ___ to this
Agreement.
6.2.5 No Material Adverse Change. There shall have occurred no material
adverse change (whether or not covered by insurance) in the assets,
financial condition or prospects of the Properties.
6.2.6 Delivery of Other Documents. The following documents shall have been
delivered to Buyer:
6.2.6.1 Certificate. A certificate, dated as of the Closing Date,
executed by duly authorized officers of Sellers certifying that the
conditions contained in Section 8.2.1 have been satisfied;
6.2.6.2 Opinion. The opinion of counsel to the Sellers, dated the
Closing Date, in the form attached hereto as Exhibit ___;
6.2.6.3 Consents. The consents required by Section 5.7;
6.2.6.4 Good Standing Certificates. Certificates of legal existence
and good standing dated within five (5) days prior to the Closing
Date for each of the Sellers from the respective jurisdictions in
which they are incorporated and the jurisdictions in which they are
qualified to do business;
6.2.6.5 Certified Resolutions. Certified copies of resolutions of
the board of directors, and if necessary, the stockholders of
Sellers authorizing the execution, delivery and performance of this
Agreement and all acts of Sellers required or advisable in
connection with the transactions contemplated hereby;
6.2.6.6 Certified Charter. True and complete copies of the
Certificates of Incorporation of each of the Sellers, certified by
the Secretary of State of their respective states of incorporation
as of a date within five (5) days prior to Closing.
6.2.6.7 Title Reports, Surveys and Environmental Reports. Reports
and certificates of title, surveys and reports on environmental and
zoning conditions of the Properties reasonably satisfactory to
Buyer.
6.2.6.8 Other. Such other documents as counsel for Buyer shall
reasonably request.
6.3 Conditions to the Sellers' Obligations. The obligations of the Sellers
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment at or prior to the Closing of each of the following
conditions:
6.3.1 Representations and Warranties. The representations and warranties
of Buyer contained in this Agreement shall be true and correct on the date
hereof and as of the Closing Date as though such representations and
warranties were made as of the Closing Date, and Buyer shall have duly
performed or complied with all of the obligations to be performed or
complied with by them under the terms of this Agreement on or prior to the
Closing.
6.3.2 Approvals. All authorizations or approvals or other action required
in connection with the execution, delivery and performance of this
Agreement by Buyer, and the consummation by Buyer of the transactions
contemplated hereby shall have been obtained.
6.3.3 Delivery of Documents. The following documents shall have been
delivered to the Sellers.
6.3.3.1 Certificate. A certificate, dated as of the Closing Date,
executed by a duly authorized officer of Buyer certifying that the
conditions contained in Section 6.3.1 have been satisfied;
6.3.3.2 Opinion. The opinion of LeBaron Law Offices, counsel to
Buyer, dated the Closing Date, in the form attached hereto as
Exhibit ___;
6.3.3.3 Good Standing Certificate. Certificates of legal existence
and good standing dated within five (5) days prior to the Closing
Date for Buyer from the State of Delaware;
6.3.3.4 Certified Resolutions. Certified copies of resolutions of
the board of directors, and, if necessary, the stockholders of Buyer
authorizing the execution, delivery and performance of this
Agreement and all acts of Buyer required or advisable in connection
with the transactions contemplated hereby;
6.3.3.5 Certified Charter. A true and complete copy of the
Certificate of Incorporation of Buyer, certified by the Secretary of
State of the State of Delaware;
6.3.3.6 Stock Certificate. A certificate or certificates evidencing
the Acquired Shares; and
6.3.3.7 Other. Such other documents as counsel for the Sellers shall
reasonably request.
7. OTHER AGREEMENTS.
7.1 Mining Operations Agreement. The Parties shall enter a Mining
Operations Agreement, substantially in the form of Exhibit E attached to this
Agreement, provided for the Operation of the Properties by Sellers from and
after the Closing Date in accordance with the provisions of the Mining
Operations Agreement.
7.2 The Going Public Transaction. As promptly as possible, but in any
event, in no less than 120 days after the Closing Date (subject to one 30 day
extension at the request of Buyer), El Capitan Precious Metals, Inc. shall
consummate a transaction (the "Going Public Transaction") which will have the
effect of making El Capitan Precious Metals, Inc. a publicly traded company in
U.S. equity markets, pursuant to either the merger of El Capitan Precious
Metals, Inc. with a publicly traded entity, or the exchange of all of the shares
of then outstanding El Capitan Precious Metals, Inc. common stock for the shares
of such an entity, whichever El Capitan Precious Metals, Inc. shall determine to
be most advantageous. It is anticipated that Sellers will own 67.5% of the
resulting publicly traded entity immediately subsequent to the consummation of
the Going Public Transaction. Sellers will cooperate in all commercially
reasonable respects as may be necessary to assist in the consummation of the
Going Public Transaction. The expenses of the Going Public Transaction will be
borne by El Capitan Precious Metals, Inc. In the event the Going Public
Transaction shall not have been consummated within the time frame contemplated
by this Paragraph, Sellers hall have the right to rescind the transaction
consummated pursuant to this Agreement, by giving notice of their intention to
do so to Buyers, whereupon if the going Public Transaction shall not have been
closed within 30 days of buyer's receipt of such notice, Sellers shall redeliver
the Purchase Price to Buyer, including a duly executed and medallion guaranteed
Stock Power with respect to the Shares, and buyer shall reconvey all of the
Acquired Assets to Sellers.
8. TERMINATION.
8.1 Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to Closing, as follows:
8.1.1 Mutual Consent. By mutual consent of Buyer and Seller.
8.1.2 Breach. By Buyer on the one hand or by Seller on the other hand by
reason of the breach by the other in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement; provided, however, that either party will have 10 days to cure
a default that can be cured before the other party has a right to
terminate this Agreement.
8.1.3 Respective Conditions. By Buyer on the one hand or by Seller on the
other hand if the conditions precedent to their respective obligations
contained in Section 6.2 or 6.3 hereof, respectively, have not been met in
all material respects through no fault of the terminating party.
8.1.4 Mutual Conditions. By Buyer on the one hand or by Seller on the
other hand if any of the conditions described in Section 6.1 shall not
have been fulfilled through no fault of the terminating party.
8.1.5 Effect of Termination. Upon termination of this Agreement and the
transactions contemplated hereby, the Deposit and any interest accrued
thereon, shall promptly be refunded to Buyer.
9. GENERAL PROVISIONS.
The parties further covenant and agree as follows;
9.1 Survival of Representations and Warranties. All of the representations
and warranties of the Parties contained in this Agreement shall survive the
Closing.
9.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without providing a copy of such release or announcement to the
other Party and providing the other Party with the opportunity to comment on
such release; provided, however, that any Party may make any public disclosure
it believes in good faith is required by applicable law or regulation or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable efforts to advise the other
Party prior to making the disclosure).
9.3 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
9.4 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof, including without limitation that certain Letter of Understanding
Between El Capitan Precious Metals, Inc. and Gold and Minerals Co., Inc., dated
as of September 3, 2002, and that certain Letter of Agreement between the
Parties with respect thereto dated as of September 20, 2002.
9.5 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, that Buyer may (i) assign any or all of
its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder), and provided further that this
Section 16(e) shall not be deemed applicable to or to require any consent in the
event of any corporate merger, consolidation, amalgamation or reorganization
involving the Sellers by which the surviving entity shall possess substantially
all of the stock or all of the property rights and interests of the Sellers, and
shall be subject to all of the liabilities and obligations of Sellers under this
Agreement.
9.6 Counterparts. This Agreement may be executed in one or counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
9.7 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below.
If to Sellers: Copy to:
If to Buyer: Copy to:
El Capitan Precious Metals, Inc. LeBaron Law Offices
0000 XXX Xxxxxxxxx, Xxxxx 000 53 X. Xxxxxxxxxx Street, Suite 2
Palm Beach Gardens, FL 33410 Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Nevada without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Nevada or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Nevada, except with respect to
matters of corporate securities laws which matters shall be governed,
interpreted and enforced in accordance with the laws of the State of Delaware.
9.10 Amendment and Waivers. No amendment or waiver of any provision of
this Agreement shall be valid on any Party unless the same shall be in writing
and signed by such Party. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of prior or subsequent such
occurrence.
9.11 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.12 Expenses. Each of the Parties will bear its own costs and expense
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby, provided that none of the expenses so
incurred by Sellers shall be charged against or paid out of any of the Acquired
Assets.
9.13 Construction and Interpretation. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation.
9.14 Confidentiality. Information concerning Sellers and/or the Property
which has not previously been disclosed to the public by Sellers hall be
maintained by buyer and its personnel on a confidential basis, except and to the
extent otherwise required by applicable law or regulatory policy, and shall not
be used by Buyer and its personnel for any purpose other than the purposes of
the arrangements contemplated herein. Each party shall maintain in confidence
the contents of this Agreement and shall not disclose the same, publicly or to
any third party (other than their professional and financial advisors) without
the prior written consent of the other party, such consent not to be
unreasonably withheld or delayed, except as may otherwise be required by law or
the rules of any applicable stock exchange, provided that each Party will, to
the greatest extent practicable in the circumstances, advise and consult with
the other parties prior to making any such required disclosure, including
providing the other party with an ability to comment on any disclosure proposed
to be made.
9.15 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
9.16 Specific Performance. Each of the Parties acknowledges and agrees
that the other Party could be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.
9.17 Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Nevada, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
other security that might be required of any other Party with respect thereto.
Any Party may make service on the other Party by sending or delivering a copy of
the process to the Party to be served at the address and in the manner provided
for the giving of notices in Section 9.8 above. Nothing in this Section 9.17,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or in equity.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
BUYER SELLER
El Capitan Precious Metals, Inc. Gold and Metals, Inc.
By: s/Xxxxxxx X. Mottling By: s/ Xxxxx Xxxxxxxx
Its: President, CEO Its: President
El Capitan, Ltd.
By: s/ Xxxxx X. Xxxxxxxx
Its: President
EXHIBIT D
To
ASSET PURCHASE AGREEMENT
DEFINITIONS
"Affiliate" means any person, partnership, limited liability company,
joint venture, corporation, or other form of enterprise which Controls, is
Controlled by, or is under common Control with a Party.
"Agreement" means this Asset Purchase Agreement, including all amendments
and modifications, and all schedules and exhibits, all of which are incorporated
by this reference.
"Assets" means the Properties, Products, Business Information, and all
other real and personal property, tangible and intangible, including existing or
after-acquired properties and all contract rights held for the benefit of the
Parties hereunder.
"Business Information" means the terms of this Agreement, and any other
agreement relating to this Business, the Existing Data, and all information,
data, knowledge and know-how, in whatever form and however communicated
(including, without limitation, Confidential Information), developed, conceived,
originated or obtained by either Party in performing its obligations under this
Agreement. The term "Business Information" shall not include any Improvements,
enhancements, refinements or incremental additions to Party Information that are
developed, conceived, originated or obtained by either Party in performing its
obligations under this Agreement.
"Confidential Information" means all information, data, knowledge and
know-how (including, but not limited to, formulas, compilations, programs,
devices, methods, techniques and processes) that derives independent economic
value, actual or potential, as a result of not being generally known to, or
readily ascertainable by, third parties and which is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy, including
without limitation all analyses, interpretations, compilations, studies and
evaluations of such information, data, knowledge and know-how generated or
prepared by or on behalf of either party.
"Control" used as a verb means, when used with respect to an entity, the
ability, directly or indirectly through one or more intermediaries, to direct or
cause the direction of the management and policies of such entity through (i)
the legal or beneficial ownership of voting securities or membership interests;
(ii) the right to appoint managers, directors or corporate management; (iii)
contract; (iv) operating agreements; (v) voting trust; or otherwise; and, when
used with respect to a person, means the actual or legal ability to control the
actions of another, through family relationship, agency, contract or otherwise;
and "Control" used as a noun means an interest which gives the holder the
ability to exercise any of the foregoing powers.
"Effective Date" means the date of the Closing of the transaction
contemplated by this Agreement.
"Encumbrance" or "Encumbrances" means mortgages, deeds of trust, security
interests, pledges, liens, net profits, interest, royalties or overriding
royalty interests, other payments out of production, or other burdens of any
nature.
"Environmental Compliance" means actions performed during of after
Operations to comply with the requirements of all Environmental Laws or
contractual commitments related to reclamation of the Properties or other
compliance with Environmental Laws.
"Environmental Laws" means Laws aimed at reclamation or restoration of the
Properties; abatement of population; protection of the environment; protection
of wildlife, including endangered species; ensuring public safety from
environmental hazards; protection of cultural or historic resources; management,
storage or control of hazardous materials and substances; releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances as waste into the environment, including without
limitation, ambient air, surface water and groundwater, and all other Laws
relating to the manufacturing, processing, distribution, use, treatment,
storage, disposal, handling or transport of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.
"Environmental Liabilities" means any and all claims, actions, causes of
action, damages, losses, liabilities, obligations, penalties, judgments, amounts
paid in settlement, assessments, costs, disbursements, or expenses (including,
without limitation, attorneys' fees and costs, experts' fees and costs, and
consultants' fees and costs) of any kind or of any nature whatsoever that are
asserted against either Party, by any person or entity other than the other
Party, alleging liability (including without limitation, liability for studies,
testing or investigatory costs, cleanup costs, response costs, removal costs,
remediation costs, containment costs, restoration costs, corrective action
costs, closure costs, reclamation costs, natural resource damages, property
damages, business losses, personal injuries, penalties or fines) arising out of,
based on or resulting from (i) the presence, release, threatened release,
discharge or emission into the environment of any hazardous materials or
substances existing or arising on, beneath or above the Properties and/or
emanating or migrating and/or threatening to emanate or migrate from the
Properties to off-site properties; (ii) physical disturbance of the environment;
or (iii) the violation or alleged violation of any Environment Laws.
"Governmental Fees" means all location fees mining claim rental fees,
mining claim maintenance payments and similar payments required by Law to locate
and hold unpatented mining claims.
"Law" or "Laws" means all applicable federal, state and local laws
(statutory or common), rules, ordinances, regulations, grants, concessions,
franchises, licenses, orders, directives, judgments, decrees, and other
governmental restrictions, including permits and other similar requirements,
whether legislative, municipal, administrative or judicial in nature.
"Mining" means the mining, extracting, producing, beneficiating, handling,
milling or other processing of Products.
"Operations" means the Mining activities carried out on the Properties
under this Agreement.
"Party" means Sellers or Buyer, or any permitted successor or assign of
Sellers of Buyer under the Agreement.
"Party Information" means all information, data, knowledge and know-how,
in whatever form and however communicated (including, without limitation,
Confidential Information but excluding the Existing Data), which, as shown by
written records, was developed, conceived, originated or obtained by a Party:
(a) prior to entering into this Agreement, or (b) independent of its performance
under the terms of this Agreement.
"Products" means all ores, minerals and mineral resources produced from
the Properties.
"Properties" means the Claims, the Leases, the Contracts, the Fixtures and
Improvements, the Machinery and Equipment, the Water Rights, the Related Rights
and the Information which, taken together, constitute the El Capitan Gold Mining
Property in Lincoln County, New Mexico.
"Transfer" means, when used as a verb, to sell, grant, assign, create an
Encumbrance, pledge or otherwise convey, or dispose of or commit to do any of
the foregoing, or to arrange for substitute performance by an Affiliate or third
party, either directly or indirectly; and, when used as a noun, means such a
sale, grant, assignment, Encumbrance, pledge or other conveyance or disposition,
or such an arrangement.
