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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is made as this 5th
day of March, 1999, by and among Iron Mask Mining Company, an Idaho
corporation (hereinafter referred to as "IMMC"); Yellow Pine Resources,
Inc., a Montana corporation (hereinafter referred to as "YPRI"); and
▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ 0. ▇▇▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; and, ▇▇▇▇▇▇▇ Creditor Trust
(hereinafter collectively referred to as the "Stockholders"), who are
the sole shareholders of YPRI;
BACKGROUND:
A. The Stockholders own or will own as of the Closing Date (as
defined below), all of the issued and outstanding stock of YPRI
(the "YPRI Stock"), which they desires to exchange pursuant to the
terms, conditions and covenants of this Agreement, solely for
shares of voting Common Stock of IMMC. par value (the "IMMC
Stock") as hereinafter provided; and,
B. IMMC desires to acquire all of the YPRI Stock from the
Stockholders, solely in exchange for shares of IMMC Stock, as
hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants
herein contained, the parties hereto hereby agree as follows:
1. THE EXCHANGE OF SHARES.
On the Closing Date, the Stockholders agree to deliver or cause to
be delivered to IMMC all of the issued and outstanding shares of YPRI
Stock (the " YPRI Exchange Shares"). In exchange for the YPRI Exchange
Shares, IMMC shall issue to the Stockholders 6,000,000 shares of common
stock of IMMC Stock (the "IMMC Exchange Shares") as follows:
▇▇▇▇ ▇▇▇▇▇▇▇ 1,710,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 870,000
▇▇▇▇▇▇▇ 0. ▇▇▇▇▇▇▇ 450,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 435,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 855,000
▇▇▇▇ ▇▇▇▇▇▇▇ 60,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 60,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 60,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 750,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 150,000
▇▇▇▇▇▇▇ Creditor Trust 600,000
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2. DELIVERY OF SHARES.
2.1 Delivery. At the Closing the Stockholders, as the holder of
all outstanding certificates representing shares of YPRI Stock, shall,
upon surrender of such certificates, receive the IMMC Exchange Shares
which shall be delivered to the Stockholders at the principal office of
the Stockholders.
2.2 Unrestricted Nature of Shares. As provided in Section 14 of
this Agreement, the parties propose that a portion of the IMMC Exchange
Shares will be issued in reliance on Regulation 504 promulgated
pursuant to the Securities Act of 1933 (the "Act') and will be "free
trading," subject to control restrictions.
3. ENDORSEMENT OF YPRI SHARES.
The Stockholders shall deliver the certificates representing the
YPRI Exchange Shares, duly endorsed in blank by the Stockholders or
accompanied by blank stock powers, with signatures Medallion Guaranteed
by a national bank, and with all necessary transfer tax and other
revenue stamps, acquired at the Stockholders's expense, affixed and
canceled. The Stockholders agrees to cure any deficiencies with respect
to the endorsement of the certificates or other documents of conveyance
with respect to such YPRI Exchange Shares or with respect to the stock
powers accompanying any YPRI Exchange Shares.
4. CLOSING.
The exchange and delivery of shares referred to in Section 2
hereof (hereinafter referred to as the "Closing") shall take place on
6th day of April, 1999 at the law offices of Christian, Samson & ▇▇▇▇▇,
P.C., Attorneys at Law, 3 1 0 West Spruce, Missoula, Montana 5 9807 or
at such other time and date as IMMC, YPRI and the Stockholders may in
writing designate, which date shall be referred to as the "Closing
Date." 'Time is of the essence. The effective date for accounting/tax
purposes shall be April 5, 1999.
5. REPRESENTATIONS AND WARRANTIES OF THE Stockholders AND YPRI.
The Stockholders and YPRI represent and warrant that all of the
following representations and warranties shall, except as otherwise
disclosed herein, be true at the time of Closing and that such
representations and warranties as made at the time of Closing shall
survive the Closing for a period of two (2) years from the Closing Date
(which date is hereinafter called the "Expiration Date").
5.1 Due Organization. YPRI is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Montana and is duly authorized, qualified and licensed under all
applicable laws, regulations, ordinances and orders of public
authorities to carry on its businesses in the places and in the manner
as now conducted except where the failure to be so authorized,
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qualified or licensed would not have a material adverse effect on the
business of YPRI taken as a whole. Copies of the Articles of
Incorporation, Bylaws, each as amended, stock records and minute books
of YPRI as heretofore made available to IMMC, are correct and complete.
5.2 Authorization. The Stockholders and YPRI have full legal
right, power and authority to enter into this Agreement, and the
exchange of YPRI Exchange Shares for IMMC Exchange Shares, pursuant to
the provisions of this Agreement will transfer valid title in the YPRI
Exchange Shares to IMMC, free and clear of all liens, encumbrances and
claims of every kind.
5.3 Capital Stock of YPRI. The authorized capital stock of YPRI
consists solely of ____________ shares of voting common stock, ____ par
value, of which 10.000 shares are issued and outstanding. All of the
issued and outstanding shares of the capital stock of YPRI are owned by
the Stockholders, and are free and clear of all liens, encumbrances and
claims of every kind. All of the issued and outstanding shares of YPRI
Stock have been duly authorized and validly issued, are fully paid and
nonassessable, are owned of record and beneficially by the Stockholders
and further, such shares were offered, issued, sold and delivered by
YPRI in compliance with all applicable state and federal laws
concerning the issuance of securities.
5.4 Transactions in Capital Stock. No option, warrant, call,
conversion right or commitment of any kind exists which obligates YPRI
to issue any of its authorized but unissued capital stock. In addition,
YPRI has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein
or to pay any dividend or make any distribution in respect thereof.
5.5 Financial Statements. The Stockholders have delivered to IMMC
copies of unaudited financial and must prepare within sixty (60) days
from the Closing Date audited financial statements to be filed with the
Securities and Exchange Commission. The YPRI financial statements will
been prepared in accordance with generally accepted accounting
principles and applied on a consistent basis throughout the periods
indicated. The YPRI financial statements will present fairly the
financial condition of YPRI as of the date indicated thereon, and such
Statements of Earnings, and Cash Flows and Retained Earnings will
present fairly the results of its respective operations for the periods
indicated thereon.
5.6 Mining Claims. The Stockholders have delivered to IMMC an
accurate list and summary description (Schedule 5.6) of each mining
claim owned by YPRI (hereinafter "YPRI Claims"). The YPRI Claims owned
by YPRI constitute substantially all of the property, real or personal,
owned by YPRI.
5.7 Material Contracts and Commitments. YPRI is not a party to,
nor bound by, any material contracts, or commitments (including, but
not limited to, joint venture or partnership agreements, contracts with
any labor organizations, loan agreements, indemnity or guaranty
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agreements, bonds, mortgages, options to purchase land, liens, pledges
or other security agreements) other than as disclosed on "Exhibit 5.7"
hereto.
5.8 Conformity with Law. YPRI is not in material default under any
law or regulation or under any order of any court or -federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality having jurisdiction over either of them which
would have a material adverse effect on their businesses, taken as a
whole; and there are no claims, actions, suits or proceedings, pending
or threatened, against or affecting YPRI, at law or in equity, or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over either of them and no notice of any claim, action,
suit or proceeding, whether pending or threatened, has been received.
YPRI has conducted and is conducting its business in compliance with
the requirements, standards, criteria and conditions set forth in
applicable federal, state and local statutes, ordinances, permits,
licenses, orders, approvals, variances, rules and regulations and is
not in violation of any of the foregoing which might materially and
adversely affect the business, operations, affairs, prospects,
properties, assets, profits or condition (financial or otherwise) of
them, taken as a whole.
5.9 Taxes. YPRI has timely filed all requisite federal and other
tax returns for all fiscal periods ended; and there are no open years,
examinations in progress or claims against them for federal and other
taxes (including penalties and interest) for any period. YPRI and its
subsidiaries will conform their taxable year end to that of IMMC.
5.10 Absence of Changes. Since the date of the YPRI financial
statements, there has not been:
(a) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business
of YPRI;
(b) any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or
business of YPRI;
(c) any change in the authorized capital of YPRI or in their
respective securities outstanding or any change in their
respective ownership interests or any grant of any options,
warrants, calls, conversion rights or commitments;
(d) any declaration or payment of any dividend or
distribution in respect of the capital stock or any direct or
indirect redemption, purchase or other acquisition of any of the
capital stock of YPRI;
(e) any transaction by YPRI outside the ordinary course of
their respective businesses.
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5.11 Deposit Accounts, Powers of Attorney. The Stockholders have
delivered to IMMC an accurate schedule as of the date of the Agreement,
of
(a) the name of each financial institution in which YPRI has
accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account; and
(d) the name of each person authorized to draw thereon or
have access thereto.
YPRI has also set forth the name of each person, corporation, firm or
other entity holding a general or special power of attorney from YPRI
and a description of the terms of such power.
5.12 Environmental Matters. YPRI has no knowledge of any assertion
by any governmental agency or other regulatory authority of any
environmental lien or action.
5.13 Validity of Obligations. The execution and delivery of this
Agreement by YPRI and the performance of the transactions contemplated
herein have been duly and validly authorized by the Board of Directors
of YPRI, and this Agreement has been duly and validly authorized by all
necessary corporate action and is a legal, valid and binding obligation
of the Stockholders and YPRI.
5.14 Relations with Government. YPRI has not made, offered or
agreed to offer anything of value to any governmental official,
political party or candidate for government office nor has it otherwise
taken any action which would cause YPRI to be in violation of the
Foreign Corrupt Practices Act of 1977, as amended or any law of similar
effect.
5.15 Disclosure. This Agreement and all other documents and
information furnished to IMMC and its representatives pursuant hereto
do not and will not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
not misleading. If YPRI or the Stockholders become aware of any fact or
circumstance which would change a representation or warranty of YPRI or
the Stockholders in this Agreement or any representation made on behalf
of YPRI, YPRI and the Stockholders shall immediately give notice of
such fact or circumstance to IMMC. However, such notification shall not
relieve either YPRI or the Stockholders of their respective obligations
under this Agreement, and at the sole option of IMMC, the truth and
accuracy of any and all warranties and representations of YPRI, or on
behalf of YPRI and of the Stockholders at the date of this Agreement
and at the closing, shall be a precondition to the consummation of this
transaction.
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5.16 Employee Benefit Plans. YPRI does not maintain or otherwise
have any liability (whether direct or indirect, actual or contingent)
in respect of any employee pension benefit plan {as such term is
defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")} or under any "employee welfare benefit
plan" {as such term is defined in Section 3(l) of ERISA}.
5.17 No Subsidiaries. YPRI has no subsidiaries, and there are no
related entities controlled by YPRI.
6. REPRESENTATIONS OF IMMC.
IMMC represents and warrants that all of the following
representations and warranties be true at the time of Closing and that
such representations and warranties as made at the time of Closing
shall survive the Closing for a period of two (2) years from the
Closing Date (which date is hereinafter called the "Expiration Date"),
unless otherwise modified by documents furnished to YPRI.
6.1 Due Organization. IMMC is duly organized, validly existing and
in good standing under the laws of the State of Idaho, and is duly
authorized, qualified and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to carry on
its business in the places and in the manner as now conducted except
where the failure to be so authorized, qualified or licensed would not
have a material adverse effect on the business of IMMC taken as a
whole. Copies of the Articles of Incorporation, Bylaws, stock records
and minute books of IMMC as heretofore made available to YPRI, are
complete and correct.
6.2 Authorization. IMMC has full legal right, power and authority
to enter into this Agreement, and the exchange of the IMMC Exchange
Shares for the YPRI Exchange Shares, pursuant to the provisions of this
Agreement will transfer valid title in the IMMC Exchange Shares to the
Stockholders, free and clear of all liens, encumbrances and claims of
every kind,
6.3 Capital Stock of IMMC. The authorized capital stock of IMMC
consists solely of 100,000,000 shares of voting common stock,
_______________ par value, of which ________________ shares are issued
and outstanding. The IMMC Exchange Shares to be delivered to the
Stockholders at the Closing Date will constitute valid and legally
issued shares of IMMC fully paid and nonassessable, and with the
exception of restrictions upon resale, will be legally equivalent in
all respects to the IMMC Stock issued and outstanding as of the date
hereof.
6.4 Transactions in Capital Stock. No option, warrant, call,
conversion right or commitment of any kind exists which obligates IMMC
to issue any of their authorized but unissued capital stock.
6.5 Financial Statements. IMMC has delivered to YPRI and
Stockholders copies of the following financial statements (the "IMMC
Financial Statements"):
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IMMC's unaudited financial statement as (hereinafter referred to
as the IMMC Financial Statements") and Statements of Earnings,
Cash Flows and Retained Earnings for the period ended ___________.
The IMMC Financial Statements have been prepared in accordance with
generally accepted accounting principles and applied on a consistent
basis throughout the periods indicated (except as noted). The IMMC
Financial Statements present fairly the financial condition of IMMC as
of the date indicated thereon, unless disclosed in Schedule 6.5
attached hereto, and such Statements of Earnings, and Cash Flows and
Retained Earnings present fairly the results of its respective
operations for the periods indicated thereon.
6.6 Property. IMMC owns no property other than as set forth in
"Exhibit 6.6" hereto.
6.7 Liabilities. IMMC has no liabilities other than as set forth
in "Exhibit 6.7 hereto.
6.8 Conformity with Law. IMMC is not in material default under any
law or regulation or under any order of any court or federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality having jurisdiction over them which would
have a material adverse effect on their businesses, taken as a whole;
and except to the extent set forth in Schedule 6.9, there are no
claims, actions, suits or proceedings, pending or threatened, against
or affecting IMMC or the IMMC Subsidiaries at law or in equity, or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over either of them and no notice of any claim, action,
suit or proceeding, whether pending or threatened, has been received.
IMMC and the IMMC Subsidiaries have conducted and are conducting their
businesses in substantial compliance with the requirements, standards,
criteria and conditions set forth in applicable federal, state and
local statutes, ordinances, permits, licenses, orders, approvals,
variances, rules and regulations and is not in violation of any of the
foregoing which might materially and adversely affect the business,
operations, affairs, prospects, properties, assets, profits or
condition (financial or otherwise) of them, taken as a whole.
6.9 Taxes. IMMC has timely filed all requisite federal and other
tax returns for all fiscal periods, there are no open years,
examinations in progress or claims against them for federal and other
taxes (including penalties and interest) for any period or periods and
no notice of any claim, whether pending or threatened, for taxes has
been received, except as disclosed in "Exhibit 6.91' hereto.
6.10 Absence of Changes. Since the date of the IMMC financial
statements, there has not been:
(a) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business
of IMMC;
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(b) any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or
business of IMMC;
(c) any declaration or payment of any dividend or
distribution in respect of the capital stock or any direct or
indirect redemption, purchase or other acquisition of any of the
capital stock of IMMC;
6.11 Deposit Accounts; Powers of Attorney. IMMC has delivered to
the Stockholders an accurate schedule as of the date of the Agreement,
of
(a) the name of each financial institution in which IMMC has
accounts or safe deposit boxes;
(b) the names in which the accounts or boxes are held;
(c) the type of account; and
(d) the name of each person authorized to draw thereon or
have access thereto.
IMMC has delivered the name of each person, corporation, firm or other
entity holding a general or special power of attorney from IMMC and a
description of the terms of such power.
6.12 Environmental Matters. IMMC has no knowledge of any assertion
by any governmental agency or other regulatory authority of any
environmental lien or action.
6.13 Validity of Obligations. The execution and delivery of this
Agreement by the IMMC and the performance of the transactions
contemplated herein have been duly and validly authorized by the Board
of Directors of IMMC, and this Agreement has been duly and validly
authorized by all necessary corporate action and is a legal, valid and
binding obligation of the IMMC.
6.14 Relations with Government. IMMC has not made, offered or
agreed to offer anything of value to any governmental official,
political party or candidate for government office nor has it otherwise
taken any action which would cause IMMC to be in violation of the
Foreign Corrupt Practices Act of 1977, as amended or any law of similar
effect.
6.15 Disclosure. This Agreement and all other documents and
information furnished to the Stockholders and its representatives
pursuant hereto do not and will not include any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading. If IMMC becomes aware of any fact or
circumstance which would change a representation or warranty of IMMC in
this Agreement or any representation made on behalf of IMMC, IMMC shall
immediately give notice of such fact or circumstance to the
Stockholders. However, such notification shall not relieve IMMC of its
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obligations under this Agreement, and at the sole option of the
Stockholders, the truth and accuracy of any and all warranties and
representations of IMMC at the date of this Agreement and at the
Closing, shall be a precondition to the consummation of this
transaction.
6.16 Employee Benefit Plans. IMMC does not maintain or otherwise
have any liability (whether direct or indirect, actual or contingent)
in respect of any "employee pension benefit plan" (as such term is
defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") I or under any "employee welfare benefit
plan" { as such term is defined in Section 3(1) of ERISA}.
6.17 Affiliations and Subsidiaries. IMMC does not presently own,
of record or beneficially, or control, directly or indirectly, the
capital stock securities convertible into capital stock of any other
equity interest in any corporation, association or business entity.
IMMC is not, directly or indirectly, a participant in any joint
venture, partnership or other non-corporate entity. Further, IMMC does
not own any subsidiary corporations.
6.18 Predecessor Status; Etc. IMMC has not owned any predecessor
companies. IMMC has never been a subsidiary or division of another
corporation nor been a part of an acquisition which was later
rescinded, other than as disclosed in "Exhibit 6.18" hereto.
7. COVENANTS OF THE STOCKHOLDERS AND YPRI PRIOR TO CLOSING.
7.1 Access and Cooperation; YPRI. YPRI will afford to the officers
and authorized representatives of IMMC access to all of YPRI's
properties, books and records and will furnish IMMC with such
additional financial and operating data and other information as to the
business and properties of YPRI as IMMC may from time to time
reasonably request. YPRI will cooperate with IMMC, its representatives,
engineers, auditors and counsel in the preparation of any documents or
other material which may be required in connection with any documents
or materials required by any governmental agency. IMMC will cause all
information obtained in connection with the negotiation and performance
of this Agreement to be treated as confidential in accordance with the
provisions of Section 13 hereof
7.2 Access and Cooperation; IMMC. YPRI will afford to the officers
and authorized representatives of IMMC access to all of YPRI's
properties, books and records and will furnish IMMC with such
additional financial and operating data and other information as to the
business and properties of YPRI as IMMC may from time to time
reasonably request. YPRI and Stockholders will cooperate with IMMC, its
representatives, engineers, auditors and counsel in the preparation of
any documents or other material which may be required in connection
with any documents or materials required by any governmental agency.
IMMC will cause all information obtained in connection with the
negotiation and performance of this Agreement to be treated as
confidential in accordance with the provisions of Section 13 hereof.
7.3 Conduct of Business. Stockholders shall cause YPRI to:
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(a) carry on its business in substantially the same manner as
they have heretofore and not introduce any material new method of
management, operation or accounting;
(b) maintain their respective properties and facilities,
including those held under leases, in as good working order and
condition as at present, ordinary wear and tear excepted;
(c) perform all of their respective material obligations
under agreements relating to or affecting their respective assets,
properties or rights;
(d) keep in full force and effect present insurance policies
or other comparable insurance coverage;
(e) use their best efforts to maintain and preserve their
business organization intact, retain their present employees and
maintain their respective relationships with suppliers, customers
and others having business relations with YPRI or IMMC, as the
case may be;
(f) maintain compliance with all permits, laws, rules and
regulations, consent orders, etc.;
(g) maintain present debt and lease instruments and not enter
into new or amended debt or lease instruments, without the
knowledge and consent of all parties hereto; and
(h) maintain present salaries and commission levels for all
officers, directors, employees levees and agents.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDERS.
The obligations of the Stockholders hereunder are subject to the
following conditions.
8.1 Representations and Warranties; Performance of Obligations.
The representations and warranties of IMMC contained in Section 7 shall
be accurate as of the Closing Date as though such representations and
warranties had been made as of that time; and all of the terms,
covenants and conditions of this Agreement to be complied with and
performed by IMMC on or before the Closing Date shall have been duly
complied with and performed.
8.2 No Litigation. No action or proceeding before a court or any
other governmental agency or body shall have been instituted or
threatened to restrain or prohibit the acquisition by IMMC of the YPRI
Exchange Shares and no governmental agency or body shall have taken any
other action or made any request of IMMC as a result of which the
management of IMMC deems it inadvisable to proceed with the
transactions hereunder.
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8.3 No Material Adverse Change. No material adverse change in the
results of operations, financial condition or business of IMMC and
shall have occurred, and IMMC shall not have suffered any material loss
or damages to any of its properties or assets, whether or not covered
by insurance, since the IMMC Financial Statements, which change, loss
or damage materially affects or impairs the ability of IMMC to conduct
its business.
8.4 Counsel Approval. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental hereto and
all other related legal matters shall have been approved by, Christian,
Samson & ▇▇▇▇▇, P.C., counsel to the Stockholders.
8.5 Opinion of Counsel. The Stockholders shall have received an
opinion from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel to IMMC, dated the Closing Date,
in form and substance satisfactory to the Stockholders, to the effect
that:
(a) IMMC has been duly organized and is validly existing in
good standing under the laws of the State of Idaho;
(b) this Agreement has been duly authorized, executed and
delivered by IMMC and constitutes a valid and binding agreement of
IMMC enforceable in accordance with its terms except as such
enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement and other, similar laws
relating to or affecting the rights of creditors except as the
same may be subject to the effect of general principles of equity
and that no opinion need be expressed as to the enforceability of
indemnification provisions included herein; and
(c) the shares of IMMC Stock to be received by the
Stockholders on the Closing Date shall be duly authorized, fully
paid and nonassessable.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF IMMC.
The obligation's of IMMC hereunder are, at its option, subject to
the satisfaction, on or prior to the Closing Date, of the following
conditions.
9.1 Representations and Warranties, Performance of Obligations.
The representations and warranties of the Stockholders and YPRI
contained in this Agreement shall be true on and as of the Closing Date
with the same effect as though such representations and warranties had
been made on and as of such date and all of the agreements of the
Stockholders and YPRI shall have been performed.
9.2 No Litigation. No action or proceeding before a court or any
other governmental agency or body shall have been instituted or
threatened to restrain or prohibit the acquisition by IMMC of the YPRI
Stock, and no governmental agency or body shall have taken any other
action or made any request of IMMC as a result of which the management
of IMMC deems it inadvisable to proceed with the transactions
hereunder.
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9.3 No Material Adverse Change. No material adverse change in the
results of operations, financial condition or business of YPRI shall
have occurred, and YPRI shall not have suffered any material loss or
damages to any of its properties or assets, whether or not covered by
insurance, since the YPRI Balance Sheet Date, which change, loss or
damage materially affects or impairs the ability of YPRI to conduct its
business; and IMMC shall have received a certificate signed by the
Stockholders dated the Closing Date to such effect.
9.4 Counsel Approval. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental hereto and
all other related legal matters shall have been approved by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, counsel to IMMC.
9.5 Opinion of Counsel. IMMC shall have received an opinion from
Christian, Samson & ▇▇▇▇▇, P.C., counsel to YPRI and the Stockholders,
dated the Closing Date, in form and substance satisfactory to IMMC, to
the effect that:
(a) YPRI has been duly organized and is validly existing in
good standing under the laws of the Province of Ontario;
(b) this Agreement has been duly authorized, executed and
delivered by the Stockholders and constitutes a valid and binding
agreement of the Stockholders enforceable in accordance with its
terms except as such enforceability may be subject to bankruptcy,
moratorium, insolvency, reorganization, arrangement and other
similar laws relating to or affecting the rights of creditors
except as the same may be subject to the effect of general
principles of equity and that no opinion need be expressed as to
the enforceability of indemnification provisions included herein;
and
(c) the shares of YPRI Stock to be received by IMMC on the
Closing Date shall be duly authorized, fully paid and
nonassessable.
(d) all mining claims have been validly conveyed to YPRI and
there are no claims or suits pending against the same.
10. INDEMNIFICATION.
10.1 Indemnification by the Stockholders. The Stockholders
covenants and agrees that it will indemnify, defend, protect and hold
harmless IMMC and YPRI at all times from and after the date of this
Agreement until the Expiration Date from and against all claims,
damages, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without
limitation, reasonable attorneys' fees and expenses of investigation)
incurred by IMMC in excess of Ten Thousand Dollars ($ i 0,000) in the
aggregate as a result of or incident to any material breach of the
representations and warranties set forth in Section 5 of this Agreement
or certificates attached pursuant thereto and any misrepresentations or
nonfulfillment of any agreement on the part of the Stockholders under
this Agreement.
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10.2 Indemnification by IMMC. IMMC covenants and agrees that it
will indemnify and hold harmless the Stockholders at all times from and
after the date of this Agreement until the Expiration Date from and
against all claims, damages actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred by YPRI in excess of Ten Thousand Dollars
($10,000) in the aggregate as a result of or incident to any material
breach of the representations and warranties set forth in Section 6 of
this Agreement or on the schedules or certificates attached pursuant
thereto and any misrepresentations or nonfulfillment of any agreement
on the part of IMMC under this Agreement.
10.3 Third Person Claims. Promptly after any party hereto
(hereinafter the "Indemnified Party") has received notice of or has
knowledge of any claim by a person not a party to this Agreement
("Third Person") or the commencement of any action or proceeding by a
Third Person, the Indemnified Party shall, as a condition precedent to
a claim with respect thereto being made against any party obligated to
provide indemnification pursuant to Sections 10. 1 or 10.2, hereof
(hereinafter the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or the commencement of such action or
proceeding. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof, and such notice
shall be effective if delivered prior to expiration of the period of
indemnity pursuant to Sections 10. 1 and 10.2. The Indemnifying Party
shall have right to defend and settle, at its own expense and by its
own counsel, any such matter so long as the Indemnifying Party pursues
the same in good faith and diligently. If the Indemnifying Party
undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel in the
defense thereof and in any settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing the Indemnifying Party
with any books, records or information reasonably requested by the
Indemnifying Party that are in the Indemnified Party's possession or
control. Notwithstanding the foregoing, the Indemnified Party shall
have the right to participate in any matter through counsel of its own
choosing at its own expense (unless there is a conflict of interest
that prevents counsel for the Indemnifying Party from representing
Indemnified Party, in which case the Indemnifying Party will reimburse
the Indemnified Party for the expenses of its counsel); provided that
the Indemnifying Party's counsel shall always be lead counsel and shall
determine all litigation and settlement steps, strategy and the like.
After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability,
and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any
defense or settlement of such asserted liability, except to the extent
such participation is requested by the Indemnifying Party, in which
event the Indemnified Party shall be reimbursed by the Indemnifying
Party for reasonable additional legal expenses, out-of-pocket expenses
and allocable share of employee compensation incurred in connection
75
with such participation for any employee whose participation is so
requested. If the Indemnifying Party desires to accept a final and
complete settlement of any such Third Person claim and the Indemnified
Party refuses to consent to such settlement, then the Indemnifying
Party's liability under this Section with respect to such Third Person
claim shall be limited to the amount so offered in settlement by said
Third Person and the Indemnified Party shall reimburse the Indemnifying
Party for any additional costs of defense which it subsequently incurs
with respect to such claim. If the Indemnifying Party does not
undertake to defend such matter to which the Indemnified Party is
entitled to indemnification hereunder, or fails diligently to pursue
such defense, the Indemnified Party may undertake such defense through
counsel of its choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such matter, and the
Indemnifying Party shall reimburse the Indemnified Party for the amount
paid in such settlement and any other liabilities or expenses incurred
by the Indemnified Party in connection therewith, provided, however,
that under no circumstances shall the Indemnified Party settle any
Third Person claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.
10.4 Tax Liability. In the event IMMC incurs any tax liability in
connection with the transaction described herein, YPRI and the
Stockholders will promptly reimburse IMMC therefore.
10.5 Method of Payment. All claims paid to the Indemnified Party
pursuant to this indemnity shall be paid in cash.
11. TERMINATION OF AGREEMENT.
IMMC or the Stockholders may, by notice in the manner hereinafter
provided on or before the Closing Date, terminate this Agreement if a
material default shall be made by the other party in the observance or
in the due and timely performance of any of the covenants, agreements
or conditions contained herein, and the curing of such default shall
not have been made on or before the Closing Date and shall not
reasonably be expected to occur.
12. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
12.1 IMMC. IMMC recognizes and acknowledges that it has in the
past, currently has, and prior to the Closing Date, will have access to
certain confidential information of YPRI, such as lists of its mining
claims and operations of YPRI and YPRI's respective businesses. IMMC
agrees that it will not disclose such confidential information to any
person, firm, corporation, association, or other entity for any purpose
or reason whatsoever, prior to the Closing Date without the
Stockholders's prior written consent. In the event of a breach or
threatened breach by IMMC of the provisions of this Section, the
Stockholders shall be entitled to an injunction restraining IMMC from
disclosing, in whole or in part, such confidential information. Nothing
contained herein shall be construed as prohibiting the Stockholders
from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages.
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12.2 Damages. Because of the difficulty of measuring economic
losses as a result of the breach of the foregoing covenants, and
because of the immediate and irreparable damage that would be caused
for which they would have no other adequate remedy, IMMC, YPRI and the
Stockholders agree that, in the event of a breach by any of them of the
foregoing covenant, the covenant may be enforced against them by
injunctions and restraining orders.
13. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON IMMC STOCK.
13.1 Status of Stockholders. Stockholders hereby represents and
warrants to, and covenants with IMMC regarding as follows:
(a) The undersigned Subscriber understands that the Company's
Shares of Common Stock have not been approved or disapproved by
the United States Securities and Exchange Commission, any state
securities agency; or any foreign securities agency;
(b) The undersigned Subscriber is not an underwriter and
would be acquiring the Company's shares of Common Stock solely for
investment for his or her own account and not with a view to, or
for, resale in connection with any distribution within the meaning
of any federal securities act, state securities act or any other
applicable federal or state laws;
(c) The undersigned Subscriber understands the speculative
nature and risks of investments associated with the Company, and
confirms that the shares of Common Stock would be suitable and
consistent with his or her investment program; that his or her
financial position enable him or her to bear the risks of this
investment; and, that there is no public market for the shares of
Common Stock subscribed for herein;
(d) The shares of Common Stock subscribed for herein may not
be transferred, encumbered, sold, hypothecated, or otherwise
disposed of, if such disposition will violate any federal and/or
state securities acts. Disposition shall include, but is not
limited to acts of selling, assigning, transferring, pledging,
encumbering, hypothecating, giving, and any form of conveying,
whether voluntary or not shares issued to residents of the State
of Washington may not be resold for a period of one (1) year from
the date of issuance;
(e) To the extent that any federal, and/or state securities
laws shall require, the Subscriber hereby agrees that any shares
of Common Stock acquired pursuant to this Agreement shall be
without preference as to assets;
(f) The Company is under no obligation to register or seek an
exemption under any federal securities act, state securities act,
or any foreign securities act for any shares of Common Stock of
the Company or to cause or permit such shares of Common Stock to
be transferred in the absence of any such registration or
exemption;
77
(g) The Subscriber has had the opportunity to ask questions
of the Company and has received additional information from the
Company to the extent that the Company possessed such information,
necessary to evaluate the merits and risks of any investment in
the Company. Further, the Subscriber has been given: (1) All
material books, records and financial statements of the Company;
(2) all material contracts and documents relating to the proposed
transaction; and, (3) an opportunity to question the appropriate
executive officers of the Company;
(h) The Subscriber has satisfied the suitability standards
imposed by his or her applicable state laws and has a preexisting
personal and business relationship with the Company;
(i) The Subscriber has adequate means of providing for his
current needs and personal contingencies and has no need to sell
the shares of Common Stock in the foreseeable future (that is at
the time of the investment, Subscriber can afford to hold the
investment for an indefinite period of time);
j) The Subscriber has sufficient knowledge and experience in
financial matters to evaluate the merits and risks of this
investment and further, the Subscriber is capable of reading and
interpreting financial statements; and/or
(k) The Subscriber acknowledges that if he/she/it is a
resident of the State of Florida, he/she/it has the privilege of
declaring this transaction null and void provide the Subscriber
communicates such intention to the Company in writing within three
(3) days of the of the tender of his/her/its consideration.
13.2 Status of IMMC. IMMC hereby represents and warrants to and
covenants with the Stockholders as that it is not obligated to file
reports with the United States Securities and Exchange Commission and
has not registered the shares of common stock with the United States
Securities and Exchange Commission or with the state securities
commission of the State of Montana.
14. GENERAL.
14.1 Cooperation The Stockholders and IMMC shall each deliver or
cause to be delivered to the other on the Closing Date, and at such
other times and places as shall be reasonably agreed to, such
additional instruments as the other may reasonably request for the
purpose of carrying out this Agreement. The Stockholders will cooperate
and use its best efforts to have the present officers, directors and
employees of YPRI cooperate with IMMC on and after the Closing Date in
furnishing information, evidence, testimony and other assistance in
connection with any actions, proceedings, arrangements or disputes of
any nature with respect to matters pertaining to all periods prior to
the Closing Date.
78
14.2 Successors and Assigns. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law) and
shall be binding upon and shall inure to the benefit of the parties
hereto, the successors of IMMC and the Stockholders.
14.3 Entire Agreement. This Agreement (including the schedules and
Exhibits attached hereto) and the documents delivered pursuant hereto
constitute the entire agreement and understanding between the
Stockholders, YPRI, and IMMC and supersede any prior agreement and
understanding relating to the subject matter of this Agreement. This
Agreement, upon execution, constitutes a valid and binding agreement on
the parties thereto enforceable in accordance with its terms and may be
modified or amended only by a written instrument executed by the
Stockholders, YPRI, and IMMC acting through their respective officers,
duly authorized by their respective Boards of Directors.
14.4 Counterparts. This Agreement may be executed simultaneously
in two (2) or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and the
same instrument.
14.5 Brokers and Agents. Each party represents and warrants that
it employed no broker, finder or agent in connection with this
transaction and agrees to indemnify the other against all loss, cost,
damages or expense arising out of claims for fees or commission of
brokers employed or alleged to have been employed by such indemnifying
party.
14.6 Expenses. Each party will be responsible for their own
expenses in connection with this Agreement.
14.7 Notices. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage
prepaid and registered or certified with return receipt requested,
overnight courier addressed to the party to be notified, postage
prepaid, or by delivering the same in person to an officer or agent of
such party.
(a) If to IMMC, addressed to it at:
Iron Mask Mining Company
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attorney at Law
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) If to the Stockholders, addressed to it at:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
Attorneys at, Law
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to YPRI, addressed to it at:
Yellow Pine Resources, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
Attorneys at Law
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
14.8 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Idaho and any action brought
hereunder shall be exclusively in the state or federal courts of the
State of Idaho.
14.9 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements of the parties
made herein and at the time of the Closing or in writing delivered
pursuant to the provisions of this Agreement shall survive the
consummation of the transactions contemplated hereby and any exam.
examination on behalf of the parties.
14.10 Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such
right, power or remedy, nor shall it be construed as a waiver of or
acquiescence in any such breach or default, or of any similar breach or
default occurring later; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default occurring
before or after that waiver.
14.11 Time. Time is of the essence of this Agreement.
14.12 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties,
and if such modification is not possible, such provision shall be
severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
IMMC:
IRON MASK MINING COMPANY
ATTEST:
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
___________________________
YPRI:
YELLOW PINE RESOURCES, INC.
ATTEST:
BY: __________________________________
__________________________ Title:
Stockholders:
_________________________ ____________________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________ ____________________________
▇▇▇▇▇▇▇ 0. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________ ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
_________________________ ____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________ ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ CREDITOR TRUST
BY: _____________________
Title: ______________
