SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") is made as of October 27, 2005, by
the Aigedzor Mining Company LLC, a Delaware, USA limited liability company
("Buyer"), and Xxxxxx Sakhkalian, an individual resident in 00 Xxxxx Xxxxxx,
xxxxxxxxx 00, Xxxxxxxxxx, Xxxxxxx, consisting of one hundred percent of the
"participants" of Sipan 1, LLC an Armenian limited liability company, "Seller").
RECITALS
Seller desires to sell, and Buyer desires to purchase, all of the issued and
outstanding shares of participation (the "Shares") in Sipan 1, LLC an Armenian
limited liability company as described in Ownership Certificates of Shares in
Company issued by the Ministry of Justice attached hereto, which holds valid
exploration and mining licenses, a processing plant, and other assets and
improvements in Armenia for the mining property known as Lichkvaz - Tey and
Terterasar mines and other license areas all as described in the Disclosure
Letter attached (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:
1. 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 Seller to Buyer;
(b) the execution, delivery, and performance of the Escrow Agreement,
the Noncompetition Agreements, the Seller's Releases;
(c) the performance by Buyer and Seller of their respective covenants
and obligations, including the delivery of the first rated bank guarantee
from Buyer, under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and exercise of
control over the Acquired Company,
"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 Seller 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.
"Escrow Agreement" -- any escrow agreement necessary in connection with the
Closing to hold funds or documents pending the clearance of security interests,
liens, possible claims, or other matters.
"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, provincial, 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
Company.
"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) (iii).
"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 (f) any minutes, protocols, or documents
related to a Person's decisions or actions; and (g) 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.
"Seller" -- as defined in the first paragraph of this Agreement.
"Seller's 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.
2. SALE AND TRANSFER OF SHARES; CLOSING.
2.1. Shares. Subject to the terms and conditions of this Agreement, at the
Closing, Seller will sell and transfer the Shares to Buyer, and Buyer
will purchase the Shares from Seller.
2.2. Purchase Price. The purchase price (the "Purchase Price") for the
Shares will be Four Million Five Hundred Fifty Thousand United States
Dollars ($4,550,000 USD), payable as follows: (a) Three Million Five
Hundred Fifty Thousand United States Dollars ($3,550,000 USD) at the
Closing, and (b) One Million United States Dollars ($1,000,000 USD) to
be paid in Three (3) years of the date of the Closing, less any amount
related to claims or liabilities incurred or related to events prior
to the date of Closing(hereinafter the "Guaranteed Amount"). Buyer
shall present a first rated bank guarantee for the Guaranteed Amount
no later than Closing Date. Purchase Price is inclusive of and the
Seller is solely responsible for all taxes, fees and levies, duties
and other charges provided under applicable Armenian legislation at
the time of signing of this Agreement, 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 Seller.
2.3. Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Global Gold Mining, LLC
Armenian Branch, Tamanian 2a, suite #2, Yerevan, Armenia, at 10:00
a.m. (local time) on the later of (i) November 11, 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.
2.4. Closing Obligations. At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares (for obtaining
which the Buyer shall provide assistance to Seller, as
necessary), 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;
(ii) releases in the form of Exhibit 2.4(a)(ii) executed by
Seller (collectively, "Seller's Releases");
(iii) noncompetition agreements in the form of Exhibit
2.4(a)(iv), executed by Seller (collectively, the "Noncompetition
Agreements"); and
(iv) a certificate executed by Seller representing and
warranting to Buyer that each of Seller'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 (giving full
effect to any supplements to the Disclosure Letter that were
delivered by Seller to Buyer prior to the Closing Date in
accordance with Section 5.5);
(v) all records, assets, and materials related to the
Company, not in the Company's possession as of the Closing date;
and
(vi) an acknowledgment that the Fifty Thousand US Dollar
($50,000 USD) nonrefundable deposit paid by Global Gold Mining,
LLC pursuant to the January 20, 2004 "Purchase Deposit Agreement"
and extended through October 15, 2005 is credited to reduce the
amount Buyer is to pay at the Closing provided that the Seller
shall not be responsible for taxes occurred for the Acquired
Company in the result of such acknowledgement.
(vii) one or more special mining licenses covering the right
to mine, process, and sell gold and other minerals for terms of
at least Seventeen (17) years at the properties described in the
Disclosure Letter.
(b) Buyer will deliver to Seller:
(i) the amount totaling Three Million Five Hundred Thousand
($3,500,000) US Dollars as provided by Escrow Agreement,
(ii) first rated bank guarantee for the payment of the One
Million US dollars ($1,000,000 USD) to Seller in Three (3) years
of the Closing date, as provided in Section 2.2 above,
(iii) 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.
2.5. Adjustment Amounts. The Adjustment Amount (which may be a positive
number only if Buyer elects to retain additional equipment added to
the asset list of the Company provided with the Disclosure Letter or a
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.
2.6. Adjustment Procedure.
(a) Seller will prepare and will cause the Company's 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. Seller 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 Seller 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.
(b) 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 and if Buyer
elects to to retian the additional equipment or other additional
assets if any, Buyer will pay the difference to Seller, and if the
Purchase Price is less than such aggregate amount, Seller will pay the
difference to Buyer. Payments must be made in immediately available
funds.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represent and warrant
to Buyer as follows:
3.1. Organization and Good Standing.
(a) 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.
(b) Seller has delivered to Buyer copies of the Organizational
Documents of the Acquired Company, as currently in effect.
3.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with
its terms. Upon the execution and delivery by Seller of the Seller's
Releases, and the Noncompetition Agreements (collectively, the
"Seller's Closing Documents"), the Seller's Closing Documents will
constitute the legal, valid, and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms.
Seller has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Seller's
Closing Documents and to perform their obligations under this
Agreement and the Seller's Closing Documents.
(b) 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):
(i) 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;
(ii) 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 Seller, or any of the
assets owned or used by the Acquired Company, may be subject;
(iii) 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;
(iv) cause Buyer or the Acquired Company to become subject
to, or to become liable for the payment of, any Tax;
(v) cause any of the assets owned by the Acquired Company to
be reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) 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
(vii) 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, the Seller or the
Acquired Company is not or will not 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 Lichkvaz - Tey and Terterasar license areas as
well as to operate an associated plant there, including the sale of their
products domestically and for export.
3.3. Capitalization. The authorized equity of the Company consist of 1000
shares of participants interests, book value 10000 AMD per share.
Seller is and will be on the Closing Date the record and beneficial
owner and holder of the Shares, free and clear of all Encumbrances. 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 registered 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 of the
Acquired Company) nor any direct or indirect equity nor ownership
interest in any other business.
3.4. Financial Statements. Seller has delivered to Buyer: (a) consolidated
balance sheets of the Acquired Company 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
Ameria, independent 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,
independent public accountants, and (c) an unaudited consolidated
balance sheet of the Acquired Company as at September 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 Armenian accounting principles
consistent 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 Armenian
accounting principles consistent with GAAP to be included in the
consolidated financial statements of the Company.
3.5. 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.
3.6. 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. Seller has 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 Seller 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,
licenses, 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
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.
3.7. Condition and Sufficiency of Assets. The structures, and equipment of
the Acquired Company are structurally sound, are in good operating
condition, 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.
3.8. 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.
3.9. 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.
3.10. 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.
3.11. Taxes.
(a) The Acquired Company has filed or caused to be filed (on a
timely basis since 2000) 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. Seller has 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 2000. 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 Seller 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 Armenian accounting principles
consistent with GAAP) have been provided in the Balance Sheet and the
Interim Balance Sheet.
(b) 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 2005.
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, neither the
Seller nor 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.
(c) The charges, accruals, and reserves with respect to Taxes on
the respective books of the Acquired Company are adequate (determined
in accordance with Armenian accounting principles consistent 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.
(d) 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.
3.12. 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.
3.13. Employee benefits.
(a) 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.
(ii) 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.
(iii) Part 3.13(iii) of the Disclosure Letter sets forth a
calculation of the liability of the Acquired Company for
benefits.
(iv) 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.
(b) Seller has delivered to Buyer, or will deliver to Buyer
within ten days of the date of this Agreement:
(i) 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;
(ii) all personnel, payroll, and employment manuals and
policies;
(iii) 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;
(iv) a written description of any Company Plan or Company
Other Benefit Obligation that is not otherwise in writing;
(v) all statements filed with respect to any Company Plan;
(vi) all insurance policies purchased by or to provide
benefits under any Company Plan;
(vii) all contracts with third parties that relate to any
Company Plan or Company Other Benefit Obligation;
(viii) 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
(ix) all notifications to employees of their rights.
(c) Except as set forth in Part 3.13(vi) of the Disclosure
Letter:
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) Since September 30, 2005, there has been no
establishment or amendment of any Company Plan or Company Other
Benefit Obligation.
(vi) 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.
(vii) 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 Seller's Knowledge, is Threatened.
(viii) No Company Plan is a stock bonus, pension, or
profit-sharing plan.
(ix) The consummation of the Contemplated Transactions will
not result in the payment, vesting, or acceleration of any
benefit.
3.14. Compliance with Legal Requirements; Governmental Authorizations.
(a) Except as set forth in Part 3.14 of the Disclosure Letter:
(i) the Acquired Company is, and at all times since its
formation 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;
(ii) 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
(iii) the Acquired Company has not received, at any time
since its formation 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.
(b) 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:
(i) the Acquired Company is, and at all times since its
formation 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;
(ii) 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;
(iii) the Acquired Company has not received, at any time
since its formation 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
(iv) 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.
3.15. Legal Proceedings; Orders.
(a) Except as set forth in Part 3.15 of the Disclosure Letter,
there is no pending Proceeding:
(i) 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
(ii) 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 Seller 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. Seller has 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.
(b) Except as set forth in Part 3.15 of the Disclosure Letter:
(i) there is no Order to which the Acquired Company, or any
of the assets owned or used by the Acquired Company, is subject;
(ii) Seller is not subject to any Order that relates to the
business of, or any of the assets owned or used by, the Acquired
Company; and
(iii) 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.
(c) Except as set forth in Part 3.15 of the Disclosure Letter:
(i) the Acquired Company is, and at all times since its
formation 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;
(ii) 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
(iii) the Acquired Company has not received, at any time
since its formation any 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.
3.16. 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:
(a) 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;
(b) amendment to the Organizational Documents of the Acquired
Company;
(c) 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;
(d) 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;
(e) 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;
(f) 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);
(g) 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;
(h) 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);
(i) material change in the accounting methods used by the
Acquired Company; or
(j) agreement, whether oral or written, by the Acquired Company
to do any of the foregoing.
3.17. Contracts; No Defaults.
(a) Part 3.17(a) of the Disclosure Letter contains a complete and
accurate list, and Seller has delivered to Buyer true and complete
copies, of:
(i) 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);
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to the Acquired
Company of an amount or value in excess of One Thousand US
Dollars ($1,000.00);
(iii) 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);
(iv) 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);
(v) 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;
(vi) each collective bargaining agreement and other
Applicable Contract to or with any labor union or other employee
representative of a group of employees;
(vii) 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;
(viii) 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;
(ix) each Applicable Contract providing for payments to or
by any Person based on sales, purchases, or profits, other than
direct payments for goods;
(x) each power of attorney that is currently effective and
outstanding;
(xi) 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;
(xii) each Applicable Contract for capital expenditures in
excess of Five Thousand US Dollars ($5,000.00);
(xiii) 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
(xiv) 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.
(b) Except as set forth in Part 3.17(b) of the Disclosure Letter:
(i) Seller (and any Related Person of Seller) has not or may
not acquire any rights under, and Seller has not or may not
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
(ii) 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.
(c) 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.
(d) Except as set forth in Part 3.17(d) of the Disclosure Letter:
(i) the Acquired Company is, and at all times since its
formation 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;
(ii) 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 its formation has
been, in full compliance with all applicable terms and
requirements of such Contract;
(iii) 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
(iv) the Acquired Company has not given to or received from
any other Person, at any time since its formation 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.
(e) 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.
(f) 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.
3.18. Insurance.
(a) Seller has delivered to Buyer:
(i) 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;
(ii) true and complete copies of all pending applications
for policies of insurance; and
(iii) 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.
(b) Part 3.18(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting the
Acquired Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by the
Acquired Company; and
(iii) 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.
(c) 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:
(i) a summary of the loss experience under each policy;
(ii) 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:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief description of the claim;
and
(iii) a statement describing the loss experience for all
claims that were self-insured, including the number and aggregate
cost of such claims.
(d) Except as set forth on Part 3.18(d) of the Disclosure Letter:
(i) All policies to which the Acquired Company is a party or
that provide coverage to Seller, the Acquired Company, or any
director or officer of the Acquired Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is financially sound
and reputable;
(C) taken together, provide adequate insurance coverage
for the assets and the operations of the Acquired Company;
(D) 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;
(E) will continue in full force and effect following
the consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective premium
adjustment or other experienced-based liability on the part
of the Acquired Company.
(ii) Neither the Seller nor 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.
(iii) 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.
(iv) The Acquired Company has given notice to the insurer of
all claims that may be insured thereby.
3.19. Environmental Matters. Except as set forth in part 3.19 of the
disclosure letter:
(a) 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. Neither the Seller nor 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
Seller 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 Seller, 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.
(b) There are no pending or, to the Knowledge of Seller 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 Seller or the Acquired Company has or had an interest.
(c) Neither the Seller nor 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
Seller 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
Seller, 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.
(d) Neither the Seller nor the Acquired Company, nor 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 Seller 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.
(e) 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.
Seller, the Acquired Company, any other Person for whose conduct they
are or may be held responsible, or any other Person, has not permitted
or conducted, or is not aware of, any Hazardous Activity conducted
with respect to the Facilities or any other properties or assets
(whether real, personal, or mixed) in which Seller or the Acquired
Company has or had an interest.
(f) There has been no Release or, to the Knowledge of Seller 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 Seller or the Acquired Company has or had an interest,
or any geologically or hydrologically adjoining property, whether by
Seller, the Acquired Company, or any other Person.
(g) Seller has delivered to Buyer true and complete copies and
results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Seller or the Acquired Company pertaining to
Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by Seller, the Acquired Company,
or any other Person for whose conduct they are or may be held
responsible, with Environmental Laws.
3.20. Employees.
(a) 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.
(b) 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 Seller or the Acquired Company by any such employee or
director.
(c) 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.
3.21. Labor Relations; Compliance. Since its formation the Acquired Company
has not been nor is a party to any collective bargaining or other
labor Contract. Since its formation 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.
3.22. Intellectual Property.
(a) Intellectual Property Assets. The term "Intellectual Property
Assets" includes:
(i) the name, Sipan 1 all fictional business names, trading
names, registered and unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights"); and
(iv) 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.
(b) 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
Seller's Knowledge, no Threatened disputes or disagreements with
respect to any such agreement.
(c) Know-How Necessary for the Business.
(i) 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.
(ii) 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.
(d) Patents.
(i) 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.
(ii) 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.
(iii) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To Seller's
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(iv) No Patent is infringed or, to Seller's 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.
(e) Trademarks.
(i) 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.
(ii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and, to Seller's Knowledge, no such
action is Threatened with the respect to any of the Marks.
(iii) To Seller's Knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(iv) No Xxxx is infringed or, to Seller's 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.
(f) Copyrights.
(i) 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.
(ii) 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.
(iii) No Copyright is infringed or, to Seller's 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.
(iv) All works encompassed by the Copyrights have been marked
with the proper copyright notice.
(g) Trade Secrets.
(i) 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.
(ii) Seller and the Acquired Company have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of
their Trade Secrets.
(iii) 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
Seller's 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.
3.23. Certain Payments. Since its formation 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.
3.24. Disclosure.
(a) No representation or warranty of Seller 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.
(b) 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.
(c) There is no fact known to Seller that has specific application to
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.
3.25. Relationships with Related Persons. Neither the Seller nor any
Related Person of Seller 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. Neither the Seller nor any Related Person of
Seller 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,
neither the Seller nor any Related Person of Seller or of the Acquired
Company is a party to any Contract with, or has any claim or right
against, the Acquired Company.
3.26. Brokers or Finders. Seller and its 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.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller as follows:
4.1. Organization and Good Standing. Buyer is a limited liability company
with Global Gold Mining, LLC's participation, duly organized, validly
existing, and in good standing under the laws of the State of
Delaware, USA.
4.2. Authority; No Conflict.
(a) 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 the Buyer's Closing Documents,
and to perform its obligations under this Agreement and the Buyer's Closing
Documents.
(b) 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:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board or the member(s) of
Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) 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.
4.3. Investment Intent. Buyer is acquiring the Shares for its own account.
4.4. 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.
4.5. 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 Seller
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.
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE.
5.1. Access and investigation. Between the date of this Agreement and the
Closing Date, Seller 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.
5.2. Operation of the Businesses of the Acquired Company. Between the date
of this Agreement and the Closing Date, Seller will, and will cause
the Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(b) use its 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;
(c) confer with Buyer concerning operational matters of a
material nature; and
(d) otherwise report periodically to Buyer concerning the status
of the business, operations, and finances of such Acquired Company.
5.3. Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date,
Seller 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.
5.4. Required Approvals. As promptly as practicable after the date of this
Agreement, Seller 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. Between the date of this
Agreement and the Closing Date, Seller will, and will cause each
Acquired Company to, (a) cooperate with Buyer with respect to all
filings required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Buyer in obtaining
all consents.
5.5. Notification. Between the date of this Agreement and the Closing Date,
Seller will promptly notify Buyer in writing if Seller or the Acquired
Company becomes aware of any fact or condition that causes or
constitutes a Breach of any of Seller's representations and warranties
as of the date of this Agreement, or if 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, Seller will
promptly deliver to Buyer a supplement to the Disclosure Letter
specifying such change. During the same period, Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of Seller
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.
5.6. Payment of Indebtedness by Related Persons. Except as expressly
provided in this Agreement, Seller will cause all indebtedness owed to
the Acquired Company by Seller or any Related Person of Seller to be
paid in full prior to Closing.
5.7. No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, Seller 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.
5.8. Best Efforts. Between the date of this Agreement and the Closing Date,
Seller will use its Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE.
6.1. 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 Seller with respect to all
filings that Seller is required by Legal Requirements to make in
connection with the Contemplated Transactions, and (ii) cooperate with
Seller 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.
6.2. 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.
7. 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):
7.1. Accuracy of Representations.
(a) All of Seller'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, without giving effect to any supplement to the
Disclosure Letter.
(b) Each of Seller's 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.
7.2. Seller's Performance.
(a) All of the covenants and obligations that Seller 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 duly performed
and complied with in all material respects.
(b) 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.
7.3. 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.
7.4. Additional Documents. Each of the following documents must have been
delivered to Buyer:
(a) An opinion of legal counsel, dated as of the closing date in
the form of Exhibit 7.4(a)
(b) 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 Seller's
representations and warranties, (iii) evidencing the performance by
Seller of, or the compliance by Seller with, any covenant or
obligation required to be performed or complied with by 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.
7.5. 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.
7.6. 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.
7.7. 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. Seller 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.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. Seller's
obligation to sell the Shares and to take the other actions required
to be taken by Seller 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 Seller, in whole or in part):
8.1. 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.
8.2. Buyer's Performance.
(a) 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.
(b) 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).
8.3. 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.
8.4. Additional Documents. Buyer must have caused the following documents
to be delivered to Seller:
(a) an opinion of legal counsel, dated the Closing Date, in the
form of Exhibit 8.4(a); and
(b) such other documents as Seller 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.
8.5. 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 Seller to Buyer, and (b) has been adopted or
issued, or has otherwise become effective, since the date of this
Agreement.
9. TERMINATION.
9.1. Termination Events. This Agreement may, by notice given prior to or at
the Closing, be terminated:
(a) by either Buyer or Seller if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(b) (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 Seller, 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 Seller to
comply with their obligations under this Agreement) and Seller has not
waived such condition on or before the Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller 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 November 30, 2005, or such later date as the parties may
agree upon.
9.2. 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.
10. INDEMNIFICATION; REMEDIES.
10.1. 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.
10.2. Indemnification and Payment of Damages by Seller. Seller 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:
(a) any Breach of any representation or warranty made by Seller 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 Seller pursuant to this
Agreement;
(b) any Breach of any representation or warranty made by Seller 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;
(c) any Breach by Seller of any covenant or obligation of Seller in
this Agreement;
(d) any product shipped or manufactured by, or any services provided
by, the Acquired Company prior to the Closing Date;
(e) any matter addressed in the Disclosure Letter; or
(f) 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 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.
10.3. Indemnification and Payment of Damages by Seller; Environmental
Matters. In addition to the provisions of Section 10.2, Seller 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:
(a) 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 Seller 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 Seller 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 Seller
or the Acquired Company or by any other Person for whose conduct they are
or may be held responsible; or
(b) 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 Seller 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 Seller 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.
10.4. Indemnification and Payment of Damages by Buyer. Buyer will indemnify
and hold harmless Seller, and will pay to Seller 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.
10.5. Time Limitations. If the Closing occurs, Seller 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 Seller 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 Seller notify Buyer of a
claim specifying the factual basis of that claim in reasonable detail
to the extent then known by Seller.
10.6. Limitations on Amount--Seller. Seller 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). Seller 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 Seller's representations and warranties of which Seller had
Knowledge at any time prior to the date on which such representation
and warranty is made or any intentional Breach by Seller of any
covenant or obligation, and Seller will be liable for all Damages with
respect to such Breaches.
10.7. 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.
10.8. Right of Set-off. Upon notice to Seller 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.
10.9. Procedure for Indemnification--Third Party Claims.
(a) 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.
(b) 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.
(c) 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).
(d) Seller hereby consents 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 Seller with respect to such a claim
anywhere in the world.
10.10. 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.
11. GENERAL PROVISIONS.
11.1. 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. Seller 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.
11.2. 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 Seller 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. Seller
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.
11.3. Confidentiality. Between the date of this Agreement and the Closing
Date, Buyer and Seller 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.
11.4. 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):
11.5. 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.
11.6. 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.
11.7. 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.
11.8. 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.
11.9. Disclosure Letter.
(a) 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.
(b) 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.
11.10. 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.
11.11. 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.
11.12. 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.
11.13. Time of Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
11.14. Governing Law. This Agreement will be governed by the laws of the
State of New York, USA without regard to conflicts of laws principles.
11.15. 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
of the Seller behalf of the Buyer
--------------------------- ------------------------
Xxxxxx Sakhkalian Xxxxxxx Xxxx
Director, Aigedzor
Mining Company, LLC
