EXHIBIT 2.1
STOCK TRANSFER AND EXCHANGE AGREEMENT
BY AND AMONG
USCORP, A NEVADA CORPORATION,
USMETALS, INC., A NEVADA CORPORATION,
AND ALL OF THE SHAREHOLDERS OF USMETALS, INC.
EFFECTIVE DATE: APRIL 2, 2002
STOCK TRANSFER AND EXCHANGE AGREEMENT
This Stock Transfer and Exchange Agreement (this "Agreement") is made and
entered into March 14, 2002, to be effective as of April 2, 2002, by and among
USCORP, a Nevada corporation (" USCorp"), USMETALS, INC., a Nevada corporation
("USMetals"), and each of USMetals' shareholders who are listed on Schedule 4.2
(individually, a "USMetals' Shareholder" and collectively, the "USMetals'
Shareholders"), with reference to the following facts and in consideration of
the mutual promises, covenants, agreements, terms, and provisions, to wit:
RECITALS.
A. USCorp desires to acquire USMetals through an exchange (the "Exchange"),
pursuant to which USMetals' common shares, voting, par value $0.001 per share,
(each a "USMetals Share" and collectively the "USMetals Shares"), outstanding at
the Closing (defined in Section 1.2, below) shall be each exchanged for 1 (one)
share of USCorp's common stock, par value $0.01 per share ("USCorp Shares"),
subject to and upon the terms and conditions set forth in this Agreement.
B. The respective boards of directors of USCorp and USMetals have (1)
determined that the Exchange and the other transactions contemplated in this
Agreement are desirable and in the best interests of their respective
shareholders, and (2) have duly approved the adoption of this Agreement as
evidenced by resolutions adopted by their respective boards of directors.
C. The Board of Directors of USMetals and the principal shareholders of
USMetals have determined, by their own respective, independent judgment and
decision, without first having sought counsel to advise on the integrity,
perpetuity, and corollary of the ensuing transaction, to proceed with the
transaction to become effective upon and by the execution and delivery of this
Agreement between the Parties.
D. USCorp and USMetals intend that the Exchange qualifies as a tax-deferred
reorganization under the applicable subsection of Section 368 of the Code, with
relevance to the principal transaction suggested by this Agreement.
AGREEMENT.
The Parties to this Agreement (each a "Party," and collectively, the
"Parties") hereby indefeasibly acknowledge the premises set forth in the
Recitals set forth hereinabove, and, in consideration of the representations,
warranties, covenants, and agreements set forth in this Agreement, the Parties
agree as follows:
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ARTICLE 1,
EXCHANGE.
Section 1.1 EXCHANGE. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the provisions of Section 368 of the
Code, the USMetals' Shareholders shall transfer all of the USMetals Shares to
USCorp in exchange for USCorp's transfer to the USMetals' Shareholders of USCorp
Shares (in the amounts and as described in Section 2.1). Immediately after this
Exchange, the former USMetals' Shareholders shall represent a part of the group
of new shareholders and controlling parties of USCorp, which are required to
effect the transaction to maintain eligibility under the prevailing
interpretation of Section 368(c) of the Code; the shareholders list is attached
as Schedule 1.1.
Section 1.2 CLOSING. The Closing of the Exchange and the other transactions
contemplated by this Agreement (the "Closing") shall be held at the Hyatt
Regency Suites Palm Springs, 000 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxx, 00000 commencing at ten o' clock a.m., Pacific Time, on such date
(the "Closing Date") as may be reasonably designated by USCorp; provided that it
is the intention of the Parties that the Closing shall be held on April 2, 2002.
As provided in Section 6.5, after the Closing the only conditions to the release
of this Agreement and the other documents executed in connection with the
transactions contemplated by this Agreement, shall be the approval of the
Exchange by the Board of Directors and the shareholders of USCorp. Within 10
(ten) days after such shareholder approval (the "Closing Date"), the Parties
will cause the Agreement and additional documents to be delivered to the
appropriate Party in accordance with the terms and conditions of the Agreement
and the Parties will close the Exchange (the "Closing").
ARTICLE 2
EXCHANGE OF CAPITAL STOCK
Section 2.1 EXCHANGE OF CAPITAL STOCK. At the Closing:
(A) Outstanding USMetals Shares. Each USMetals Share which is issued and
outstanding immediately prior to the Closing shall, subject to the provisions of
Section 2.2, and subject to the adjustments provided for in Section 2.1(B) and
3.3, be exchanged for (1) one USCorp Share (an aggregate of 24,200,000.00 USCorp
Shares for all USMetals Shares exchanged).
(B) Within 30 days after the Closing Date, the USMetals' Shareholders shall
cause to be prepared and delivered to USCorp the balance sheet of USMetals as of
December 31, 2001 (the "December 31st Balance Sheet") The December 31st Balance
Sheet shall: (1) be prepared from and in accordance with the books and records
of USMetals; (2) be prepared in conformity with generally accepted accounting
principles applied on a consistent basis, including, without limitation, the
generally accepted accounting principles set forth on Schedule 2.1(B), but
subject to the exceptions set forth on Schedule 2.1(B); and (3) fairly present
in all material respects the financial condition of USMetals as of such date in
accordance with such practices. The USMetals' Shareholders shall also deliver to
USCorp copies of the work papers used in connection with the preparation of the
December 31st Balance Sheet.
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Section 2.2 EXCHANGE OF CERTIFICATES; ISSUANCE OF SHARES.
(A) Delivery of USMetals Share Certificates. At the Closing, each USMetals
Shareholder shall surrender to USCorp the certificates evidencing all the
USMetals Shares (the" USMetals Share Certificates") owned by such USMetals
Shareholder immediately prior to the Closing.
(B) Issuance of USCorp Shares. At the Closing, upon delivery of the USMetals
Share Certificates evidencing all of the USMetals Shares owned by each USMetals
Shareholder pursuant to Section 2.2(A), USCorp shall issue to each USMetals
Shareholder that number of USCorp Shares which such USMetals' Shareholder is
entitled to receive as described in Section 2.1. USCorp will cause its stock
transfer agent to issue to each Shareholder that number of USCorp's shares,
which such Shareholder is entitled to receive as described in Section 2.1 of
this Agreement.
(C) USCorp Shares to be Restricted Securities. The USCorp Shares to be
received by the USMetals' Shareholders in the Exchange shall be deemed to be
restricted securities within the meaning of Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act"), with the exception of the
applicability of any exemption offered in reliance of Rule 701 within the
Securities Act of 1933. The USMetals' Shareholders agree that the following
legend may be placed on the certificates for the USCorp Shares to be received by
them and that appropriate stop-transfer instructions may be given to USCorp's
transfer agent and registrar:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF 1934, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, UNLESS THEY ARE AT THE TIME SO
REGISTERED, OR THE SALE OR TRANSFER THEREOF IS NOT REQUIRED TO BE SO REGISTERED,
OR IS MADE PURSUANT TO THE APPLICABLE EXEMPTION FROM REGISTRATION PROVIDED IN
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF 1934, AS
AMENDED, OR IN THE RULES OR REGULATIONS THEREUNDER."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF USCORP
In order to induce USMetals and the USMetals' Shareholders to enter into
this Agreement, USCorp hereby represents and warrants to USMetals and the
USMetals' Shareholders that the statements set forth in this Article 3 are true,
correct and complete.
Section 3.1 ORGANIZATION AND STANDING. USCorp is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada
with full power and authority (corporate and otherwise), to conduct its
business. USCorp is duly qualified to do business and is in good standing in
each state where the nature of the business or other activities conducted by
USCorp requires it to qualify to do business, except where the failure to be so
qualified would not have a material adverse effect on the business, or condition
(financial or otherwise) of USCorp. USCorp is not in default or in violation of
the performance, observation or fulfillment of any material provision of its
Articles of Incorporation, its Bylaws or the Share Exchange Agreement.
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Section 3.2 CORPORATE POWER AND AUTHORITY. USCorp has all requisite corporate
power and authority to enter into and to perform its obligations under this
Agreement and to consummate the Exchange and other transactions contemplated by
this Agreement. This Agreement and the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of USCorp (except for final approval by the Board of
Directors and the Shareholders of USCorp, to be obtained after the date of this
Agreement). This Agreement has been duly executed and delivered by USCorp and
constitutes a legal, valid, and binding obligation of USCorp, enforceable
against USCorp in accordance with its terms, except as such enforceability may
be limited by (a) applicable bankruptcy, insolvency, or other similar laws from
time to time in effect which may affect the enforcement of creditors' rights in
general, and (b) general principles of equity.
Section 3.3 CAPITALIZATION OF USCORP. As of the date of this Agreement, USCorp's
authorized capital stock consists of 100,000,000.00 USCorp Shares of which (a)
453,567.00 Common Shares are issued and outstanding and (b) 99,546,433.00 Shares
are held as treasury shares. Each outstanding USCorp Share is, and all USCorp
Shares to be issued in connection with the Exchange will be, duly authorized,
validly issued, fully paid, and nonassessable. USMetals and the USMetals'
Shareholders acknowledge that prior to the Closing, USCorp may (i) authorize
additional capital stock, including additional USCorp Shares, or (ii) reduce the
number of outstanding USCorp Shares by means of a reverse stock split, or any
other method which would result in a reduction in the number of outstanding
USCorp Shares. USCorp will deliver written notice to USMetals and the USMetals'
Shareholders if it authorizes any such action. Except as otherwise described in
this Agreement, USCorp has not entered into any agreement which would require it
to reduce or increase the number of USCorp Shares outstanding.
Section 3.4 CONFLICTS; CONSENTS; AND APPROVALS. Neither the execution nor
delivery of this Agreement by USCorp nor compliance by USCorp with the terms and
provisions of this Agreement, including without limitation the consummation of
the transactions contemplated by this Agreement, shall:
(A) Violate, conflict with, result in a violation or breach of any
provision of, constitute a default (or an event which, with the giving of
notice, the passage of time, or otherwise, would constitute a default) under,
entitle any third party (with the giving of notice, the passage of time, or
otherwise) to terminate, accelerate, or declare a default under, or result in
the creation of any lien, security interest, charge, or other encumbrance upon
any of the assets of USCorp under any of the terms or conditions of the Articles
of Incorporation or Bylaws of USCorp, or under any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease, or
other instrument or obligation to which USCorp is a party and which is material
to USCorp;
(B) Violate any order, writ, injunction, decree, statute, rule, or
regulation, applicable to USCorp or its assets.
Section 3.5 LITIGATION. There are no suits, claims, actions, proceedings,
or investigations collectively, ("Actions") pending or, to the best knowledge of
USCorp, threatened against USCorp in which the amount in dispute exceeds (or
exceeded) $30,000, or which has or could result in liability or loss for USCorp
of more than $30,000, or which, individually or in the aggregate, is reasonably
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likely to have a material adverse effect on USCorp, or a material adverse effect
on the ability of USCorp to consummate the Exchange and other transactions
contemplated by this Agreement; and to the best knowledge of USCorp, there exist
no disputes, conflicts or circumstances providing the basis for a dispute or
conflict which could reasonably be expected to result in any such Action. USCorp
is not subject to any outstanding judgment, order, writ, injunction, or decree
which, individually or in the aggregate, has a reasonable probability of having
a material adverse effect on the business operations, assets, properties,
condition (financial or otherwise), or prospects of USCorp, or a material
adverse effect on the ability of USCorp to consummate the Exchange or other
transactions contemplated by this Agreement.
Section 3.6 BROKERAGE AND FINDER'S FEES. Neither USCorp nor any of its
shareholders, directors, officers, or employees has incurred any brokerage,
finders', or similar fee in connection with the Exchange and other transactions
contemplated by this Agreement.
Section 3.7 USCORP 10-KSB AND 10-Q. USCorp has made available to USMetals and
the USMetals' Shareholders true, correct, and complete copies of USCorp's most
recent 10-KSB for the fiscal year ending September 30, 2001 (the "10-K"), and
USCorp's most recent 10-QSB for the fiscal quarter ending December 31, 2001
("10-Q"), both of which have been filed with the Securities and Exchange
Commission ("SEC"). The financial statements of USCorp included in the 10-KSB
and 10-QSB have been prepared from and in accordance with the books and records
of USCorp and in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the 10-QSB as permitted by the
SEC under the Securities and Exchange Act of 1934, as amended) and fairly
present (subject, in the case of the 10-QSB to normal and recurring audit
adjustments) the consolidated financial position of USCorp as of the dates
thereof and the results of their operations for the periods then ended.
Section 3.8 TAXES. USCorp has duly paid, or shall cause to be paid, all taxes,
assessments, fees, and other governmental charges (hereinafter, "taxes") payable
by USCorp. USCorp has duly filed, or shall cause to be filed, all Federal,
State, and Local tax returns and tax reports required to be filed by it and all
such returns and reports are true, correct, and complete. There is no pending
or, to the best knowledge of USCorp, threatened Federal, State, or Local tax
audit or assessment relating to it, and there is no agreement with any Federal,
State, or Local, tax authority that may affect the subsequent tax liabilities of
USCorp.
Section 3.9 UNDISCLOSED LIABILITIES. USCorp has no liability or obligation of
any nature (whether liquidated, unliquidated, accrued, absolute, contingent, or
otherwise and whether due or to become due) except:
(A) Those set forth or reflected in the 10-QSB or the financial statements
therein set forth, which have not been paid or discharged since the date
thereof;
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(B) Current liabilities (determined in accordance with generally accepted
accounting principles) incurred since December 31, 2001, in transactions in the
ordinary course of business consistent with past practices which are properly
reflected on its books and which are not inconsistent with the other
representations, warranties and agreements of USCorp set forth in this
Agreement; and
(C) Liabilities which, consistent with generally accepted accounting
principles, are not required to be reflected in its financial statements.
Section 3.10 COMPLIANCE WITH LAW. To the best knowledge of USCorp, USCorp has
complied and is in compliance in all material respects with all laws, statutes,
ordinances, orders, rules and regulations promulgated, and all judgments,
decisions and orders entered, by any Federal, State, or Local court or
governmental authority or instrumentality which are applicable or relate to it
or to its businesses.
Section 3.11 NO MATERIAL ADVERSE CHANGE. Since the filing of the most recent
10-QSB with the SEC. there has been no material adverse change in the, assets,
liabilities, business, or condition (financial or otherwise) of USCorp. USCorp
is not subject to any obligation or requirement to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
entity.
Section 3.12 SECTION 368 EXCHANGE. It is the intention of USCorp to treat the
acquisition of USMetals pursuant to this Agreement, after the closing of the
transactions contemplated by this Agreement, as an exchange under Section 368 of
the Code. USCorp and USMetals intend that the Exchange qualifies as a
tax-deferred reorganization under the applicable subsection of Section 368 of
the Code, with relevance to the principal transaction suggested by this
Agreement. USCorp shall be solely responsible for evaluating (and determining
the appropriate methods required for reporting) all Federal, state, and local
income and other tax consequences to USCorp which will and may result from the
transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF USMETALS AND THE USMETALS'
SHAREHOLDERS
In order to induce USCorp to enter into this Agreement, USMetals and each
of the USMetals' Shareholders hereby jointly and severally represent and warrant
to USCorp that the statements contained in this Article 4 are true, correct, and
complete.
Section 4.1 ORGANIZATION AND STANDING. USMetals is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada with
full power and authority (corporate and otherwise) to acquire the right to own,
lease, use, and operate its mining claims, and to conduct its business as and
where now conducted. USMetals has not received any written notice or assertion
within the last three years from any governmental official in any state to the
effect that USMetals is required to be qualified or authorized to do business in
a state in which USMetals is not so qualified or has not obtained such
authorization. USMetals is not in default or in violation of the performance,
observation or fulfillment of any material provision of its Articles of
Incorporation, or Bylaws, or the Share Exchange Agreement.
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Section 4.2 CAPITALIZATION AND SECURITY HOLDERS. The authorized capital stock of
USMetals consists of 100,000,000.00 shares of which (a) 24,200,000.00 common
shares, voting, with $0.001 par value, are issued and outstanding, and (b)
75,800,000.00 of which are held as treasury shares. Schedule 4.2 contains a
correct and complete list of the names and addresses of all of the shareholders
of USMetals and indicates all USMetals Shares owned beneficially and of record
by each such shareholder. Each outstanding USMetals Share has been duly
authorized and validly issued and is fully paid and nonassessable, and no
USMetals Share has been issued in violation of preemptive or similar rights.
There are no outstanding subscriptions, options, warrants, puts, calls,
agreements, understandings, claims, or other commitments or rights of any type
relating to the issuance, sale, or transfer by USMetals or any USMetals
Shareholder of any securities of USMetals, nor are there outstanding any
securities which are convertible into or exchangeable for shares of capital
stock of USMetals; and USMetals has no obligations of any kind to issue any
additional securities. The issuance and sale of all securities of USMetals has
been in full compliance with all applicable Federal and State Securities Laws.
USMetals does not own, directly or indirectly, any equity or other ownership
interest in any corporation, partnership, joint venture, or any other entity or
enterprise. USMetals is not subject to any obligation or requirement to provide
funds to or make any investment (in the form of a loan, capital contribution, or
otherwise) in any entity.
Section 4.3 OWNERSHIP OF SHARES AND AUTHORITY. All of the USMetals Shares are
owned free and clear of all liens, security interests, encumbrances, pledges,
charges, claims, voting trusts, and restrictions of any nature whatsoever,
except restrictions on transfer imposed by or pursuant to Federal or State
Securities Laws. Each USMetals Shareholder owns beneficially and of record all
of the USMetals Shares (disclosed as being owned by him or her on Schedule 4.2),
and each USMetals Shareholder has the full and unrestricted right, power and
capacity to transfer and deliver the same and to execute this Agreement and
consummate the transactions contemplated by this Agreement without the consent
or approval of any other person. This Agreement has been duly executed and
delivered by each USMetals Shareholder and constitutes the legal, valid and
binding obligation of each USMetals Shareholder, enforceable against such
USMetals Shareholder in accordance with its terms except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, or other similar laws
from time to time in effect which may affect the enforcement of creditors'
rights in general, and (b) general principles of equity.
Section 4.4 CORPORATE POWER AND AUTHORITY. USMetals has all requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and to consummate the Exchange and other transactions contemplated by
this Agreement. This Agreement and the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of USMetals. This Agreement has been duly executed and
delivered by USMetals and constitutes the legal, valid, and binding obligation
of USMetals, enforceable against USMetals in accordance with its terms, except
as such enforceability may be limited by (a) applicable bankruptcy, insolvency,
or other similar laws from time to time in effect which may affect the
enforcement of creditors' rights in general, and (b) general principles of
equity.
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Section 4.5 CONSENTS AND APPROVALS. Except for the consents described in
Schedule 4.5, all of which shall be obtained prior to the Closing (unless
otherwise agreed by USCorp in writing), neither the execution and delivery of
this Agreement by USMetals or the USMetals' Shareholders nor the consummation of
the transactions contemplated by this Agreement requires or will require any
action, consent, or approval of, review by, or registration with any third
party, court, governmental body, or other agency, instrumentality, or authority,
other than actions to be taken in respect of Federal and State Securities Laws
as contemplated by this Agreement.
Section 4.6 FINANCIAL STATEMENTS. USMetals shall furnish to USCorp the balance
sheet of USMetals as of December 31, 2001, and the related statements of income,
changes in shareholders' equity, and cash flows for the fiscal year then ended,
including, in each case, the related notes (collectively, the "Compiled
Statements"). The Compiled Statements have been prepared from and are in
accordance with the books and records of USMetals, and fairly present in all
material respects the financial condition of USMetals as of the date stated and
the results of operations of USMetals for the period then ended in accordance
with such practices.
Section 4.7 UNDISCLOSED LIABILITIES. USMetals has no liability or obligation of
any nature (whether liquidated, unliquidated, accrued, absolute, contingent, or
otherwise and whether due or to become due) except:
(A) Those set forth or reflected in the Compiled Statements which have not
been paid or discharged since the date thereof;
(B) Current liabilities (determined in accordance with generally accepted
accounting principles) incurred since December 31, 2001, in transactions in the
ordinary course of business consistent with past practices which are properly
reflected on its books and which are not inconsistent with the other
representations, warranties, and agreements of USMetals and the USMetals'
Shareholders set forth in this Agreement; and;
(C) Liabilities which, consistent with generally accepted accounting
principles, are not required to be reflected in the Compiled Statements.
Section 4.8 ABSENCE OF CERTAIN CHANGES. Except as expressly provided for or
permitted under Section 5.2(a) or Section 5.2(b) of this Agreement, or as
disclosed elsewhere herein, since December 31, 2001, there has not been:
(A) Any material adverse change in the business, operations, assets, mining
claims, prospects, rights, or condition (financial or otherwise) of USMetals or
any occurrence, circumstance, or combination thereof which reasonably could be
expected to result in any such material adverse change;
(B) Any declaration, setting aside, or payment of any dividend or any
distribution (in cash or in kind) to any USMetals Shareholder, or any direct or
indirect redemption, purchase, or other acquisition by USMetals of any of its
capital stock, or any options, warrants, rights, or agreements to purchase or
acquire such stock;
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(C) Any increase in amounts payable by USMetals to or for the benefit of,
or committed to be paid by USMetals to or for the benefit of, any shareholder,
director, officer, or other consultant, agent, or employee of USMetals or any
relatives of such person, or any increase in any benefits granted under any
bonus, stock option, profit-sharing, pension, retirement, severance, deferred
compensation, group health, insurance, or other direct or indirect benefit plan,
payment or arrangement made to, with, or for the benefit of any such person;
(D) Any transaction entered into or carried out by USMetals other than in
the ordinary and usual course of business consistent with past practices;
(E) Any borrowing or agreement to borrow funds by USMetals, any incurring
by USMetals of any other obligation or liability (contingent or otherwise),
except liabilities incurred in the usual and ordinary course of USMetals'
business (consistent with past practices), or any endorsement, assumption or
guarantee of payment or performance of any loan or obligation of any other
person or entity by USMetals;
(F) Any material change in USMetals' method of doing business or any change
in its accounting principles or practices or its method of application of such
principles or practices;
(G) Any mortgage, pledge, lien, security interest, hypothecation, charge,
or other encumbrance imposed or agreed to be imposed on or with respect to the
mining claims, or assets of USMetals;
(H) Any sale, lease, or other disposition of, or any agreement to sell,
lease, or otherwise dispose of any of the mining claims, or assets of USMetals;
(I) Any purchase of or any agreement for an amount in excess of $50,000 for
any one purchase or $100,000 for all such purchases made by USMetals or any
lease or any agreement to lease, as lessee, any capital assets with payments
over the term thereof exceeding an aggregate of $100,000;
(J) Any loan or advance made by USMetals to any person;
(K) Any modification, waiver, change, amendment, release, rescission, or
termination of, or accord and satisfaction with respect to, any material term,
condition, or provision of any contract, agreement, license, or other instrument
to which USMetals is a party, other than any satisfaction by performance in
accordance with the terms thereof in the usual and ordinary course of business.
Section 4.9 TAXES.
(A) USMetals has duly paid or will duly cause all taxes payable by
USMetals. USMetals has duly filed or will duly cause all Federal, State, and
Local, tax returns and tax reports required to be filed by it and all such
returns and reports are or shall be true, correct, and complete.
(B) USMetals has delivered to USCorp copies of all Federal, State, and
Local, income tax returns filed with respect to it for taxable periods ended on
or after December 31, 2001 to the best knowledge of USMetals and the USMetals'
Shareholders.
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(C) All taxes attributable to the existence or operation of USMetals as at
or through December 31, 2001 are, to the extent not already paid, accurately
reflected in the Compiled Statements.
(D) There exists no tax-sharing agreement or arrangement pursuant to which
USMetals is obligated to pay the tax liability of any other person or entity or
to indemnify any other person or entity with respect to any tax.
Section 4.10 COMPLIANCE WITH LAW. Except as disclosed and briefly described in
Schedule 4.10, to the best knowledge of USMetals and the USMetals' Shareholders,
USMetals has complied and is in compliance in all material respects with all
laws, statutes, ordinances, orders, rules and regulations promulgated, and all
judgments, decisions, and orders entered, by any Federal, State, or Local, court
or governmental authority or instrumentality which are applicable or relate to
it or to its business or mining claims. To the best knowledge of USMetals and
the USMetals' Shareholders, USMetals has all licenses, permits, covenants,
authorizations, approvals, and certifications necessary or appropriate for the
operation of its business or the ownership of its mining claims. Schedule 4.10
includes a list of all material licenses, permits, consents, authorizations,
approvals, mining claims and certificates owned or held by USMetals
(collectively, the "Permits"), each of which is currently valid. To the best
knowledge of USMetals and the USMetals' Shareholders, USMetals is not in
violation of any of the Permits, and there is no pending nor, to the best
knowledge of USMetals and the USMetals' Shareholders, any threatened proceeding
which could result in the revocation, cancellation or inability of USMetals to
renew any Permit. Except as may be disclosed and briefly described in Schedule
4.10, USMetals has not been charged with or given actual notice of any violation
of any of the Applicable Laws which violation has not been remedied in full
(without any remaining liability of USMetals).
Section 4.11 RESTRICTIVE DOCUMENTS OR LAWS. USMetals is not a party to or bound
under any mortgage, lien, lease, agreement, contract, instrument, law, order,
judgment or decree, or any similar restriction not of general application which
materially and adversely affects, or reasonably could be expected to so affect
(a) the business, operations, assets, mining claims, prospects, rights, or
condition (financial or otherwise) of USMetals; (b) the continued operation by
USCorp of USMetals' business after the Closing Date on substantially the same
basis as such business is currently operated; or (c) the consummation of the
transactions contemplated by this Agreement.
Section 4.12 INSURANCE. USMetals is not insured under any term of any insurance
policy.
Section 4.13 BANK ACCOUNTS, DEPOSITORIES; POWERS OF ATTORNEY. Set forth in
Schedule 4.13 is a true, correct, and complete list of the names and locations
of all banks or other depositories in which USMetals has accounts or safe
deposit boxes, and the names of the persons authorized to draw thereon, borrow
therefrom, or have access thereto. Except as set forth in Schedule 4.13, no
person has a power of attorney from USMetals.
Section 4.14 TITLE TO AND CONDITION OF MINING CLAIMS. USMetals shall have good,
valid claim, and title to all of its assets, mining claims of every kind,
nature, and description, tangible or intangible, wherever located, which
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constitute all of the mining claims now used in and necessary for the conduct of
its business as presently conducted (including without limitation all mining
claims and assets shown or reflected on the Compiled Statements) as of the date
of closing. To the best knowledge of USMetals and the USMetals' Shareholders,
all such miming claims will be owned free and clear of all mortgages, pledges,
liens, security interests, encumbrances, and restrictions of any nature
whatsoever, including without limitation: (a) rights or claims of parties in
possession; (b) easements or claims of easements; (c) encroachments, overlaps,
boundary line or water drainage disputes, or any other matters; (d) any lien;
(e) special tax or other assessments; (f) options to purchase, leases,
tenancies, or land contracts; (g) contracts, covenants, or reservations which
restrict the use of such properties; and (h) violations of any Applicable Laws
applicable to such properties except the real property upon which USMetals'
claims are located, is subject to a paramount lien by the United States of
America; all of USMetals' claims are subject to the applicable rules and
regulations of the United States Department of the Interior, Bureau of Land
Management, which administers USMetals' use and activities on said Mining
Claims. To the best knowledge of USMetals and the USMetals' Shareholders, all
such mining claims are usable for their current uses without violating any
Applicable Laws, or any applicable private restriction, and such uses are legal
conforming uses. Schedule 4.10 contains a complete and accurate list of the
location of all mining claims which is owned, leased, or operated by USMetals
and describes the nature of USMetals' interest in that real property.
Section 4.15 BROKERS AND FINDERS. No investment banker, broker, finder, or other
intermediary: (a) has been retained by or is authorized to act on behalf of
USMetals or the USMetals' Shareholders; (b) has submitted the transactions
contemplated by this Agreement to USMetals or the USMetals' Shareholders; or (c)
is or might be entitled to any fee, commission, or other payment from USMetals
or any USMetals Shareholder as a direct or indirect result of the transactions
contemplated by this Agreement
Section 4.16 LEGAL PROCEEDINGS. There are no Actions pending or, to the best
knowledge of USMetals and the USMetals' Shareholders, threatened against or
relating to USMetals (or any of its officers, directors, shareholders, agents,
or representatives in connection with the business or affairs of USMetals),
before any Federal, State, or Local court or governmental body in which the
amount in dispute exceeds (or exceeded) $30,000 or which has or could result in
liability or loss for USMetals or any USMetals Shareholder of more than $30,000;
and to the best knowledge of USMetals and the USMetals' Shareholders, there
exist no disputes, conflicts, or circumstances providing the basis for a dispute
or conflict which could reasonably be expected to result in any such Action.
There are no Actions pending or, to the best knowledge of USMetals and the
USMetals' Shareholders, threatened for the purpose of enjoining or preventing
this Agreement or any other transaction contemplated by this Agreement or
otherwise challenging the validity or propriety of the transactions contemplated
by this Agreement. USMetals is not subject to any judgment, order or decree, or
any governmental restriction, which has a reasonable probability of having a
material adverse effect on the business operations, assets, mining claims,
condition (financial or otherwise), or prospects of USMetals.
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Section 4.17 CONTRACTS. Schedule 4.17 lists and briefly describes all contracts,
agreements, leases, arrangements, and understandings (written or oral)
("Contracts") to which USMetals is a party and which fall within any of the
following categories: (a) Contracts in the ordinary course of business; (b)
Contracts not entered into in the ordinary course of USMetals' business
(including without limitation Contracts with any present or former shareholder,
director, or officer of USMetals, or any person related by blood or marriage to
any such person, or any person controlling, controlled by, or under common
control with any such person, or with any employee, agent, or consultant of
USMetals not terminable at will); (c) Contracts which are service contracts
(excluding contracts for delivery services entered into in the ordinary course
of business) or equipment leases involving payments by USMetals of more than
$10,000 per year; (d) Contracts containing covenants or restrictions purporting
to limit the freedom of USMetals to compete in any line of business in any
geographic area or to employ or otherwise engage any person; (e) Contracts which
extend beyond one year, unless cancelable on 60 or fewer days' notice without
any liability, penalty, or premium; (f) Contracts which relate to any borrowings
or guarantees in excess of $30,000; (g) Contracts containing any obligation or
commitment which limits the freedom of USMetals to sell, lease, or otherwise
distribute any information; or (h) Contracts which are not listed above but
which are material to the condition (financial or otherwise), operations,
assets, prospects, mining claims or business of USMetals. All such Contracts are
valid and binding and in full force and effect, and, to the best knowledge of
USMetals and the USMetals' Shareholders, enforceable in accordance with their
respective terms in all material respects. Except as may be set forth in
Schedule 4.17, neither USMetals nor, to the best knowledge of USMetals and the
USMetals' Shareholders, any other party thereto, is in violation of, in default
in respect of, nor, to the best knowledge of USMetals and the USMetals'
Shareholders, has there occurred an event or condition which, with the passage
of time or giving of notice (or both) would constitute a default under any such
Contract.
Section 4.18 NO CONFLICT OF DEFAULT. Except as may be set forth on Schedule
4.18, neither the execution and delivery of this Agreement by USMetals or the
USMetals' Shareholders, nor compliance by USMetals and the USMetals'
Shareholders with the terms and provisions of this Agreement, including without
limitation the consummation of the transactions contemplated by this Agreement,
will: (a) violate any Applicable Laws or Permits; (b) conflict with or result in
the breach of any term, condition, or provision of (i) the Articles of
Incorporation, Bylaws, or other organizational document of USMetals or (ii) any
material agreement, deed, contract, undertaking, mortgage, indenture, writ,
order, decree, restriction, legal obligation, or instrument to which USMetals or
any USMetals Shareholder is a party or by which USMetals or any USMetals
Shareholder or any of their respective assets, mining claims or properties are
or may be bound or affected; (c) constitute a default (or an event which, with
the giving of notice, the passage of time, or both, would constitute a default)
thereunder; (d) result in the creation or imposition of any lien, security
interest, charge or encumbrance, or restriction of any nature whatsoever with
respect to any mining claims or assets of USMetals or any USMetals Shareholder;
or (e) give to others any interest or rights, including rights of termination,
acceleration, or cancellation in or with respect to any of the mining claims,
assets, contracts, or business of USMetals.
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Section 4.19 BOOKS OF ACCOUNT; RECORDS. USMetals' general ledgers, stock record
books, minute books and other material records relating to the assets,
properties, contracts, and outstanding legal obligations of USMetals are, in all
material respects, complete and correct, and have been maintained in accordance
with good business practices and the matters contained therein are, to the
extent required by generally accepted accounting principles, accurately
reflected in the Compiled Statements, except as may be set forth in Section 4.6.
Section 4.20 EMPLOYEES AND COMPENSATION. Schedule 4.17 lists and describes the
USMetals Employee Compensation Plan. Except as disclosed in Schedule 4.17; there
are no other forms of compensation paid to any such employee of USMetals.
Neither USMetals nor any USMetals Shareholder has any agreement or understanding
with any shareholder, director, officer, agent, employee, or representative of
USMetals which would influence any such person not to become associated with
USCorp from and after the Closing or not to serve USMetals after the Closing in
a capacity similar to the capacity presently held.
Section 4.21 INVESTMENT REPRESENTATION. Each of the USMetals' Shareholders: (a)
represents that such USMetals Shareholder owns beneficially and of record the
number of USMetals Shares set forth opposite such USMetals Shareholder's name on
Schedule 4.2; and (b) acknowledges, represents, and warrants to USCorp that (i)
such USMetals Shareholder has been provided the opportunity to ask questions and
receive answers from USCorp concerning the business operations and financial
condition of USCorp and the terms and conditions of the transactions described
in this Agreement, and to obtain any additional information necessary to verify
the accuracy of information provided to such USMetals Shareholder by USCorp, and
(ii) is acquiring the USCorp Shares to be issued pursuant to this Agreement for
such USMetals Shareholder's own accounts for investment only and not with a view
to the distribution thereof.
Section 4.22 SECTION 368 EXCHANGE. It is the intention of USMetals and the
USMetals' Shareholders to treat the acquisition pursuant to this Agreement as an
exchange under Section 368 of the Code. USCorp and USMetals intend that the
Exchange qualifies as a tax-deferred reorganization under the applicable
subsection of Section 368 of the Code, with relevance to the principal
transaction suggested by this Agreement. USMetals and the USMetals' Shareholders
shall be solely responsible for evaluating (and determining the appropriate
methods required for reporting) all Federal, state, and local income and other
tax consequences to each of them which will and may result from the transactions
contemplated by this Agreement.
ARTICLE 5,
COVENANTS OF THE PARTIES.
Section 5.1 MUTUAL COVENANTS.
(A) General. Each Party shall use all reasonable efforts to take all
actions and do all things necessary, proper, or advisable to consummate the
Exchange and the other transactions contemplated by this Agreement, including
without limitation using all reasonable efforts to cause the conditions set
forth in Article 6 of this Agreement for which such Party is wholly or partially
responsible to be satisfied as soon as reasonably practicable and to prepare,
execute, acknowledge or verify, deliver, and file such additional documents, and
take or cause to be taken such additional actions, as any other Party may
reasonably request.
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(B) Other Governmental Matters. Each Party shall use all reasonable efforts
to take any additional action that may be necessary, proper, or advisable in
connection with any other notices to, filings with, and authorizations, consents
and approvals of any court, administrative agency or commission, or other
governmental authority or instrumentality that it may be required to give, make,
or obtain.
(C) Tax-Deferred Treatment. Each of the Parties shall use all reasonable
efforts to cause the Exchange to constitute (along with other exchanges and
acquisitions occurring before and after the Exchange) a tax-deferred exchange
under Section 368 of the Code. USCorp and USMetals intend that the Exchange
qualifies as a tax-deferred reorganization under the applicable subsection of
Section 368 of the Code, with relevance to the principal transaction suggested
by this Agreement Each of the Parties shall be solely responsible for evaluating
(and determining the appropriate methods required for reporting) all Federal,
state, and local income and other tax consequences to each such Party which will
and may result from the transactions contemplated by this Agreement
Section 5.2 COVENANTS OF USMETALS AND THE USMETALS' SHAREHOLDERS.
USMetals and the USMetals' Shareholders, jointly and severally, covenant
and agree that
(A) Conduct of Business. Except as otherwise expressly contemplated by this
Agreement, from the date of this Agreement until the Closing (the "Pre-Exchange
Period"): (1) neither USMetals nor any USMetals Shareholder shall take or permit
to be taken any action or do or permit to be done anything in the conduct of the
business of USMetals, or otherwise, that would be contrary to or in breach of
any of the terms or provisions of this Agreement or which would cause any of
their representations and warranties contained in this Agreement to be or become
untrue in any material respect; (2) USMetals shall conduct its business in the
ordinary course consistent with past practices (3) USMetals and the USMetals'
Shareholders shall permit USCorp to manage and oversee the business operations
of USMetals as provided in Section 5.3(b); and without limiting the generality
of the foregoing, during the Pre-Exchange Period, except as otherwise expressly
contemplated by this Agreement or with the prior written consent of USCorp,
USMetals shall not:
(i) Adopt or propose any change in its Articles of Incorporation or
Bylaws; adjust, split, combine, or reclassify any of its capital stock; or make
any other changes in its authorized or issued capital stock;
(ii) Redeem, purchase, or otherwise acquire any shares of its capital
stock; grant any person or entity any right to acquire any shares of its capital
stock; issue, deliver, sell, or agree to issue, deliver, or sell, any additional
shares of its capital stock or any other securities; or enter into any agreement
or arrangement with respect to the sale or voting of its shares of capital
stock;
(iii) Merge or consolidate with any other person or entity or acquire a
material amount of;
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(iv) Sell, lease, license, pledge, encumber, or otherwise dispose of
any assets;
(v) Incur, create, assume, or otherwise become liable for any
indebtedness;
(vi) Enter into or modify any employment, severance, termination, or
similar agreement or arrangement with, or grant any bonuses, salary increases,
severance, or termination pay to, any officer, director, consultant, or
employee;
(vii) Adopt, amend, or terminate any employee compensation plan or
increase, amend, or terminate any benefits to officers, directors, consultants,
or employees;
(viii) Modify in any material way or terminate any of the contracts
listed or required to be listed in Schedule 4.17;
(ix) Settle any claims, litigation, or actions, whether now pending or
hereafter made or brought, unless such settlement does not involve a payment by
USMetals of more than $30,000;
(x) Engage in any transaction, or enter into any agreement, contract,
lease, or other arrangement or understanding, with any affiliate of USMetals,
except for transactions expressly permitted by this Agreement; or
(xi) Agree or commit to do any of the foregoing.
(B) Exclusive Rights. Neither USMetals nor any USMetals' Shareholder shall,
directly or indirectly, solicit (including without limitation by way of
furnishing or making available any non-public information concerning the
business, mining claims or assets of USMetals) or engage in negotiations or
discussions with, disclose any of the terms of this Agreement to, accept any
offer from, furnish any information to, or otherwise cooperate, assist, or
participate with any person or organization (other than USCorp and its
representatives) regarding any Acquisition Proposal (defined below), except that
any person or entity making an Acquisition Proposal may be informed of the
restrictions contained in this sentence. USMetals and the USMetals' Shareholders
shall notify USCorp promptly by telephone, and thereafter promptly confirm m
writing, if any such information is requested from, or any Acquisition Proposal
is received by, USMetals or any of the USMetals' Shareholders. For purposes of
this Agreement, "Acquisition Proposal" shall mean any offer or proposal received
by USMetals or any USMetals Shareholder prior to the Closing regarding the
acquisition by purchase, merger, lease, or otherwise of any capital stock of
USMetals, the business of USMetals, or any material assets, or other operations
of USMetals.
(C) Access to Records and Other Due Diligence. During the Pre-Exchange
Period, USMetals shall: make or cause to be made available to USCorp and its
representatives, attorneys, accountants, and agents, for examination,
inspection, and review, the assets and property of USMetals and all books,
contracts, agreements, commitments, records, and documents of every kind
relating to USMetals' business, and shall permit USCorp and its representatives,
attorneys, accountants and agents to have access to the same at all reasonable
15
times, including without limitation access to all tax returns filed and in
preparation and all review and other accounting work papers of USMetals'
accounts and all reports to management and related responses.
(D) Disclosures. After the date of this Agreement, neither USMetals nor any
USMetals Shareholder shall: (1) disclose to any person, association, firm,
corporation or other entity (other than USCorp or those designated in writing by
USCorp) in any manner, directly or indirectly, any proprietary information or
data relevant to the business of USMetals, whether of a technical or commercial
nature; or (2) use, or permit or assist, by acquiescence or otherwise, any
person, association, firm, corporation, or other entity (other than USCorp or
those designated in writing by USCorp) to use, in any manner, directly or
indirectly, any such information or data, excepting only use of such data or
information as is at the time generally known to the public and which did not
become generally known through any breach of any provision of this section by
USMetals or any USMetals Shareholder. Upon the termination of this Agreement for
any reason, USMetals shall promptly cause all copies of such information and
data in its possession, or in the possession of the USMetals' Shareholders, to
be returned to USCorp.
(E) Notices of Certain Events. USMetals and the USMetals' Shareholders
shall promptly notify USCorp of:
(1) Any notice or other communication from any person or entity
alleging that the consent of such person or entity is or may be required in
connection with the transactions contemplated by this Agreement;
(2) Any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(3) Any actions, suits, claims, investigations, or proceedings
commenced or, to the knowledge of USMetals or any USMetals Shareholder,
threatened against, relating to, or involving or otherwise affecting USMetals or
any USMetals Shareholder, or any of their property which, in existence on the
date of this Agreement would have been required to have been disclosed by
USMetals and the USMetals' Shareholders pursuant to Section 4.15 or which relate
to the consummation of the transactions contemplated by this Agreement
(F) Title Evidence. USMetals shall deliver to USCorp as soon as practicable
after the date of this Agreement evidence of title, in form and substance
reasonably satisfactory to USCorp, showing USMetals' title and rights in all of
the mining claims owned by USMetals, subject only to such exceptions,
encumbrances, or other matters as are reasonably satisfactory to USCorp;
specifically, except the real property upon which USMetals' claims are located,
is subject to a paramount lien by the United States of America; all of USMetals'
claims are subject to the applicable rules and regulations of the United States
Department of the Interior, Bureau of Land Management, which administers
USMetals' use and activities on said Mining Claims..
(G) Compiled Financial Statements. The USMetals' Shareholders shall deliver
to USCorp, within 30 days after the Closing Date, compiled financial statements
for the fiscal year ended December 31,2001. These compiled financial statements
shall be prepared from and shall be in accordance with the books and records of
16
USMetals, prepared in conformity with generally accepted accounting principles
applied on a consistent basis, including without limitation the generally
accepted accounting principles set forth on Schedule 2.1(b), but subject to the
exceptions set forth on Schedule 2.1(b), and fairly present in all material
respects the financial condition of USMetals as of the date stated practices.
Section 5.3 COVENANTS OF USCORP. USCorp covenants and agrees that:
(A) Conduct of USCorp's Business. Except as otherwise expressly
contemplated by this Agreement, during the Pre-Exchange Period: (i) USCorp shall
not take or permit to be taken any action or do or permit to be done anything in
the conduct of the business of USCorp, or otherwise, that would be contrary to
or in breach of any of the terms or provisions of this Agreement or which would
cause any of its representations and warranties contained in this Agreement to
be or become untrue in any material respect; and (ii) USCorp shall conduct its
business in the ordinary course consistent with past practices.
(B) Joint Operations of USCorp and USMetals. Notwithstanding anything in
this Agreement to the contrary, from and after the Closing Date, USCorp shall
manage and oversee the operation of the business of USMetals as if the Exchange
had already occurred.
(C) Confidential Information. Upon the termination of this Agreement for
any reason, USCorp shall promptly cause all proprietary information or data
relevant to the business of USMetals, whether of a technical, financial or
commercial nature and whether furnished by USMetals hereunder or otherwise
received by USCorp, and all copies, extracts and summaries thereof in its
possession or in the possession of any of its officers, shareholders or agents,
to be promptly returned to USMetals.
ARTICLE 6,
CONDITIONS.
Section 6.1 MUTUAL CONDITIONS TO CLOSING. The obligations of each of the Parties
to complete the Closing and to consummate the other transactions contemplated by
this Agreement shall be subject to fulfillment of all of the following
conditions:
(A) Completion of Schedules and Exhibits. USCorp and USMetals will proceed
in good faith to finalize the form and content of such schedules and exhibits in
a manner consistent with the terms and conditions of this Agreement and
otherwise mutually acceptable to both Parties. Upon finalizing the form and
content of such schedules and exhibits they will be attached to and become a
part of this Agreement as if they had been attached to this Agreement at the
time of execution.
(B) No Adverse Proceeding. No temporary restraining order, preliminary or
permanent injunction, or other order or decree which prevents the consummation
of the Exchange or the other transactions contemplated by this Agreement shall
have been issued and remain in effect, and no statute, rule, or regulation shall
have been enacted by any State or Federal government or governmental agency
which would prevent the consummation of the Exchange or the other transactions
contemplated by this Agreement.
17
(C) Other Governmental Approvals. Any governmental or other approvals or
reviews of this Agreement and the transactions contemplated by this Agreement
required under any applicable laws, statutes, orders, rules, regulations,
policies or guidelines promulgated thereunder, or any governance document of
USCorp or USMetals shall have been received, except for any filings which USCorp
must make with the Securities and Exchange Commission in connection with
obtaining approval from USCorp's Shareholders of the Exchange and other
transactions contemplated by this Agreement.
Section 6.2 CONDITIONS TO OBLIGATIONS OF USMETALS AND THE USMETALS' SHAREHOLDERS
TO COMPLETE THE CLOSING. The obligations of USMetals and the USMetals'
Shareholders to complete the Closing and to consummate this Agreement to be
completed at the Closing shall be subject to the fulfillment of all of the
following conditions unless waived by USMetals and the USMetals' Shareholders in
writing:
(A) Representations and Warranties. The representations and warranties of
USCorp set forth in Article 3 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing.
(B) Performance of Agreement. USCorp shall have performed and observed in
all material respects all covenants, agreements, obligations, and conditions to
be performed or observed by them under this Agreement at or prior to the
Closing.
(C) Certificate. USCorp shall have furnished USMetals and the USMetals'
Shareholders with a certificate dated the Closing Date signed by its chairman,
president, or any vice president to the effect that the conditions set forth in
Section 6.2(a) and Section 6.2(b) have been satisfied.
(D) Adverse Change and Condition. There shall have been no material adverse
change in the, assets, liabilities, business, results of operations, condition
(financial or otherwise), or prospects of USCorp since the date of the most
recent 10-QSB USMetals since December 31, 2001.
(E) USCorp Shareholder Minutes. As of the date of this Agreement,
shareholders of USCorp who have the right to vote more than 50% of the
outstanding USCorp Shares, shall submit USCorp minutes indicating they voted in
favor of the Exchange, at the USCorp shareholders meeting held for that purpose.
Copies of these minutes will be provided to USMetals by USCorp prior to the
Closing.
(F) Due Diligence. USMetals' completion of its due diligence review of
USCorp, with results satisfactory to USMetals on or before March 30,2002.
(G) Other Documents. USCorp shall have delivered the following items to
USMetals:
(i) USCorp's Articles of Incorporation, certified by the Nevada
Secretary of State as of a date not more than ten days prior to the Closing
Date;
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(ii)A good standing certificate of USCorp, issued by the Nevada
Secretary of State as of a date not more than ten days prior to the Closing
Date;
(iii) The Bylaws of USCorp, certified by the secretary of USCorp on the
Closing Date; and
(iv) Resolutions of the directors of USCorp approving, adopting, and
authorizing this Agreement contemplated by this Agreement, certified by the
secretary of USCorp on the Closing Date.
Section 6.3 CONDITIONS TO OBLIGATIONS OF USCORP TO COMPLETE THE CLOSING.
The obligations of USCorp to complete the Closing and to consummate the other
transactions contemplated by this Agreement to be completed at the Closing shall
be subject to the fulfillment of all of the following conditions unless waived
by USCorp in writing:
(A) Representations and Warranties. The representations and warranties of
USMetals and the USMetals' Shareholders set forth in Article 4 of this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing as though made at and as of the Closing.
(B) Performance of Agreement. USMetals and the USMetals' Shareholders shall
have performed and observed in all material respects all covenants, agreements,
obligations, and conditions to be performed or observed by them under this
Agreement at or prior to the Closing.
(C) Certificate. USMetals shall have furnished USCorp with a certificate
dated the Closing Date signed on its behalf by its chairman, president or any
vice president to the effect that the conditions set forth in Section 6.3(a) and
Section 6.3(b) have been satisfied.
(D) Books and Records. USMetals shall have delivered to USCorp all
corporate books and records and other materials of USMetals, including without
limitation stock books and ledgers, minute books, bank account lists, tax
returns, and financial and operational records and materials.
(E) Adverse Change and Condition. There shall have been no material adverse
change in the assets, liabilities, business, results of operations, condition
(financial or otherwise) or prospects of USMetals from that reflected in the
Compiled Statements.
(F) Other Documents. USMetals shall have delivered the following items to
USCorp:
(i) USMetals' Articles of Incorporation, certified by the Nevada
Secretary of State as of a date not more than ten days prior to the Closing
Date;
(ii) The Bylaws of USMetals, certified by the secretary of USMetals on
the Closing Date; and
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(iii) The resolutions. of the shareholders and directors of USMetals
approving, adopting, and authorizing this Agreement, certified by the secretary
of USMetals on the Closing Date.
(G) Due Diligence. USCorp's completion of its due diligence review with
results satisfactory to USCorp on or before March 30, 2002.
ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.1 TERMINATION.
(A) Termination by USMetals and the USMetals' Shareholders. This Agreement
may be terminated and canceled prior to the Closing by USMetals and the
USMetals' Shareholders if:
(i) (A) any of the representations or warranties of USCorp contained in this
Agreement shall prove to be inaccurate in any material respect, or any covenant,
agreement, obligation, or condition to be performed or observed by USCorp under
this Agreement has not been performed or observed in any material respect at or
prior to the time specified in this Agreement, and (B) such inaccuracy or
failure shall not have been cured within 5 business days after receipt by USCorp
of written notice of such occurrence from USMetals and the USMetals'
Shareholders; (ii) any permanent injunction or other order of a court or other
competent authority preventing consummation of the Exchange or any other
transaction contemplated by this Agreement shall have become final and
non-appealable; (iii) so long as USMetals and the USMetals Shareholders are not
in material breach of any representation, warranty, covenant, or agreement, if
the Closing has not occurred on or before April 2, 2002; or (iv) so long as
USMetals and the USMetals' Shareholders are not in material breach of any
representation, warranty, covenant, or agreement, if the Closing has not
occurred on or before April 2, 2002.
(B) Termination by USCorp. This Agreement may be terminated and canceled at
any time prior to the Closing by USCorp if: (i) (A) any of the representations
or warranties of USMetals or any USMetals Shareholder contained in this
Agreement shall prove to be inaccurate in any material respect, or any covenant,
agreement, obligation, or condition to be performed or observed by USMetals or
any USMetals Shareholder under this Agreement has not been performed or observed
in any material respect at or prior to the time specified in this Agreement, and
(B) such inaccuracy or failure shall not have been cured within 5 business days
after receipt by USMetals and the USMetals' Shareholders of written notice of
such occurrence from USCorp; (ii) any permanent injunction or other order of a
court or other competent authority preventing consummation of the Exchange or
any other transaction contemplated by this Agreement shall have become final and
non-appealable; (iii) so long as USCorp is not in material breach of any
representation, warranty, covenant, or agreement, if the Closing has not
occurred on or before April 2, 2002; or (iv) so long as USCorp is not in
material breach of any representation, warranty, covenant, or agreement, if the
Closing has not occurred on or before April 2, 2002.
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Section 7.2 AMENDMENT. This Agreement may be amended by the Parties, by action
taken or authorized by their respective boards of directors (to the extent such
action or authorization is required by law), at any time before or after
adoption of this Agreement by the USMetals' Shareholders and USCorp's
Shareholders, but, after such adoption, no amendment shall be made which by law
requires further adoption by the USMetals' Shareholders or USCorp Shareholders
without such further adoption. Notwithstanding the foregoing, this Agreement may
not be amended except by an instrument in writing signed by each of the Parties.
Section 7.3 EXTENSION; WAIVER At any time prior to the Escrow Closing or
Closing, as the case may be, USCorp (with respect to USMetals and the USMetals'
Shareholders) and USMetals (with respect to USCorp) may, to the extent legally
allowed: (a) extend the time for the performance of any of the obligations or
other acts of such Party; (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant
hereto; or (c) waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a Party to any such
extension or waiver shall be valid only if set forth in a written instrument
signed by such Party.
ARTICLE 8
INDEMNIFICATION
Section 8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS.
(A) Notwithstanding any investigation conducted at any time with regard
thereto by or on behalf of any Party, all representations, warranties, covenants
and agreements of USMetals, the USMetals' Shareholders and USCorp in this
Agreement shall survive the execution, delivery, and performance of this
Agreement All representations and warranties of the Parties set forth in this
Agreement shall be deemed to have been made again by them at and as of the
Closing.
(B) As used in this Article 8, any reference to a representation, warranty,
covenant, or agreement contained in any section of this Agreement shall include
the Schedule relating to such section.
Section 8.2 INDEMNIFICATION BY USMETALS' SHAREHOLDERS.
(A) Subject to the provisions of this Section 8.2 and of Section 8.4,
below, the USMetals' Shareholders, jointly and severally, shall indemnify and
hold harmless USCorp from and against any and all losses, liabilities, damages,
demands, claims, suits, actions, judgments or causes of action, assessments,
costs and expenses, including without limitation interest, penalties, reasonable
attorneys' fees, any and all reasonable expenses incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred or suffered by USCorp, directly or indirectly, as a result of
or arising from any material inaccuracy in or breach of any of the
representations, warranties, covenants, or agreements made by the USMetals'
Shareholders in this Agreement (collectively, "Indemnifiable USMetals Claims").
21
(B) USCorp shall be deemed to have suffered Damages arising out of or
resulting from the matters referred to in Section 8.2(a), above, if the same
shall be suffered by any affiliate of USCorp.
Section 8.3 INDEMNIFICATION BY USCORP.
(A) USCorp shall indemnify and hold harmless each of the USMetals' Shareholders
from and against any Damages asserted against, resulting to, imposed upon, or
incurred or suffered by any of the USMetals' Shareholders, directly or
indirectly, as a result of or arising from any (i) material inaccuracy in or
breach or non-fulfillment of any of the representations, warranties, covenants,
or agreements made by USCorp in this Agreement, (ii) subject to the limitations
set forth in Section 8.3(c), below, any and all claims, liabilities or
obligations arising out of the operation of the business of USMetals after the
Closing Date, or (ii) any and all claims, liabilities and obligations arising
out of any failure by USCorp to pay, following the Closing Date, any liability
of USMetals disclosed on the December 31st Balance Sheet or to pay any amount or
perform any obligation under any of the Contracts, (collectively, "Indemnifiable
USCorp Claims" and, together with Indemnifiable USMetals Claims, the
"Indemnifiable Claims").
(B) USCorp shall satisfy any obligation of indemnification under this
Article 8 in cash.
(C) Notwithstanding anything contained in this Agreement to the contrary, the
USMetals' Shareholders hereby acknowledge that USCorp shall not be liable to the
USMetals' Shareholders, under this Article 8 or any other provision of this
Agreement, for any claims, liabilities, or obligations arising out of the
operation of the business of USMetals prior to the Closing Date, if such claim,
liability, or obligation is caused by or results from any Indemnifiable USMetals
Claim.
Section 8.4 LIMITATIONS ON INDEMNIFICATION. Rights to indemnification under this
Article 8 are subject to the following limitations:
(A) For purposes of this Article 8, all Damages shall be computed net of
any insurance coverage which reduces the Damages that would otherwise be
sustained; provided that in all cases the timing of the receipt or realization
of insurance proceeds shall be taken into account in determining the amount of
reduction of Damages.
(B) Subject to the provisions of Section 8.4(c), below, USCorp shall not be
entitled to indemnification hereunder with respect to an Indemnifiable Claim or
Claims unless the aggregate amount of Damages with respect to such Indemnifiable
Claim or Claims exceeds $30,000.00. Once USCorp's Damages exceed $30,000.00 in
the aggregate, USCorp shall only be entitled to be indemnified to the extent of
such Damages in excess of such initial $30,000.00 of Damages.
(C) Notwithstanding and in lieu of the provisions of Section 8.4(b), above,
USCorp shall not be entitled to indemnification with respect to an Indemnifiable
Claim or Claims resulting from a breach of the representations and warranties
contained in the last paragraph of Section 4.13 unless the aggregate amount of
Damages with respect to such Indemnifiable Claim or Claims exceeds $5,000.00.
Once USCorp's Damages for any such breach exceeds $5,000.00 in the aggregate,
USCorp shall only be entitled to be indemnified to the extent of such Damages in
excess of such initial $5,000.00 of Damages.
22
(D) The obligations of indemnity under this Article 8 with respect to any
indemnifiable claim shall terminate three years after the Closing Date.
(E) If, prior to the termination of the obligation to indemnify, written
notice of an Indemnifiable Claim is given by USCorp or any of the USMetals'
Shareholders, as the case may be (an "Indemnified Party") to the other Party or
Parties, as the case may be (the "Indemnifying Party"), or a suit or action
based upon an alleged Indemnifiable Claim is commenced against the Indemnifying
Party, the Indemnified Party shall not be precluded from pursuing such
Indemnifiable Claim (whether through the courts or otherwise) by reason of the
termination of the obligation of indemnity as described in Section 8.4(d) above.
Section 8.5 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO NON-THIRD PARTY
CLAIMS. In the event that the Indemnified Party asserts the existence of an
Indemnifiable Claim giving rise to Damages (but excluding Indemnifiable Claims
resulting from the assertion of liability by third parties), it shall give
written notice to the Indemnifying Party specifying the nature and amount of the
Indemnifiable Claim asserted. If the Indemnifying Party, within 15 days after
the mailing of such notice by the Indemnified Party, has not given written
notice to the Indemnified Party announcing its intent to contest such assertion
by the Indemnified Party, such assertion shall be deemed accepted and the amount
of Indemnifiable Claim shall be deemed a valid Indemnifiable Claim. In the
event, however, that the Indemnifying Party contests the assertion of an
Indemnifiable Claim by giving such written notice to the Indemnified Party
within such 15-day period, then if the Parties, acting in good faith, cannot
reach agreement with respect to such Indemnifiable Claim within 10 days after
such notice, the contested assertion of the claim shall be resolved by a court
of competent jurisdiction. Each Party shall pay its own legal, accounting, and
other fees in connection with such a contest.
Section 8.6 RIGHT OF SETOFF. If (a) after following the procedures set forth in
Section 8.5, a Party's right to be indemnified for an Indemnifiable Claim has
been duly established and (b) the Damages associated with such Indemnifiable
Claim have not been paid by the Indemnifying Party to the Indemnified Party
within 30 days thereafter, then, in addition to its other rights under this
Agreement, the Indemnified Party shall have the right to setoff any amounts
owing to the Indemnifying Party by the Indemnified Party against any amounts
owing to the Indemnified Party by the Indemnifying Party, whether pursuant to
this Agreement (including taking into consideration the amount of such
Indemnifiable Claim in determining the amount of the valuation adjustment under
Section 2.1(b).
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. All notices and other communications under this Agreement
to any Party shall be in writing and shall be deemed given when delivered
personally, by facsimile (which is confirmed), mailed by registered or certified
mail (return receipt requested) to that Party at the address for that Party (or
at such other address for such Party as such Party shall have specified in
23
notice to the other Parties), or delivered to Federal Express, United Parcel
Service, or any other nationally recognized express delivery service for
delivery to that Party at that address:
(A) If to USCorp: Xxxxxxx Xxxxxx,
Secretary of USCorp
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
(B) If to USMetals: Xxxxxxx Xxx Secretary of USMetals 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 000 Xxx Xxxxx XX 00000
(C) If to the USMetals' Shareholders:
Xxxxxx Xxxxx Xxxxxxx Xxx
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0X0
Xxx Xxxxx, XX 00000 Xxx Xxxxx XX 00000
Xxxxxx Xxx Cash Xxxxx
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000 00000 Xxxxxxxxxx Xx. Xx. 000
Xxx Xxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx
Xxx Xxxxx, XX 00000 Xxx Xxxxx, XX 00000
Xxxxxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Section 9.2 NON-WAIVER No failure by any Party to insist upon strict compliance
with any term or provision of this Agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any default of any other Party shall
affect, or constitute a waiver of, any other Party's right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that remedy
with respect to that default or any prior, contemporaneous, or subsequent
default. No custom or practice of the Parties at variance with any provisions of
this Agreement shall affect or constitute a waiver of, any Party's right to
demand strict compliance with all provisions of this Agreement
Section 9.3 HEADINGS. The headings of the various articles and sections of this
Agreement are not part of the context of this Agreement, are merely labels to
assist in locating such articles and sections, and shall be ignored in
construing this Agreement.
Section 9.4 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same Agreement.
Section 9.5 ENTIRE AGREEMENT. This Agreement (including all exhibits, schedules,
and other documents referred to in this Agreement, all of which are hereby
incorporated herein by reference) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the Parties with respect to the subject mailer of this Agreement.
24
Section 9.6 NO THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement,
expressed or implied, is intended or shall be construed to confer upon or give
to any person, firm, corporation, or other entity, other than the Parties, any
rights, remedies, or other benefits under or by reason of this Agreement
Section 9.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to principles of
conflicts of law.
Section 9.8 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by and against the Parties and their
respective heirs, personal representatives, successors, and assigns. Neither
this Agreement nor any of the rights, interests, or obligations under this
Agreement shall be transferred or assigned by any of the Parties without the
prior written consent of the other Parties.
Section 9.9 EXPENSES. Except as otherwise specifically provided in this
Agreement (a) USCorp shall pay its costs and expenses associated with the
transactions contemplated by this Agreement, including without limitation the
fees and expenses of its legal counsel, independent public accountants, and
other financial advisors; (b) the USMetals' Shareholders shall pay their own
costs and expenses associated with this Agreement, including without limitation
the fees and expenses of their legal counsel, accountants, and financial
advisors; and (c) all such costs and expenses incurred by USMetals in connection
with this Agreement and the transactions contemplated hereby shall be accrued
and expensed, or otherwise accounted for, so that such costs and expenses (if
not paid prior to April 2, 2002) will be taken into consideration when
determining the Tangible Net Worth of USMetals pursuant to Section 2.1(b).
Section 9.10 PUBLIC ANNOUNCEMENTS. Neither USMetals nor any USMetals'
Shareholder shall, without the prior written consent of USCorp, make any public
announcement or statement with respect to the transactions contemplated in this
Agreement The provisions of this section are subject to each Party's obligation
to comply with applicable requirements of the Federal or state securities laws
or any governmental order or regulation.
25
Section 9.11 SEVERABILITY. With respect to any provision of this Agreement
finally determined by a court of competent jurisdiction to be unenforceable,
such court shall have jurisdiction to reform such provision so that it is
enforceable to the maximum extent permitted by applicable law, and the Parties
shall abide by such court's determination. In the event that any provision of
this Agreement cannot be reformed, such provision shall be deemed to be severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect.
USCORP
By
------------------------
/s/XXXXX XXXXX, PRESIDENT
USMETALS, INC.
By
------------------------
/s/XXXXXX XXXXX, PRESIDENT
THE USMETALS' SHAREHOLDERS:
By ________________________ By ________________________
/s/Xxxxxx Xxxxx /s/Xxxxxxx Xxx
By ________________________ By ________________________
/s/Xxxxxx Xxx /s/Cash Xxxxx
By ________________________ By ________________________
/s/Xxxxx Xxxxxxxx /s/Xxxxx Xxxxxxxx
By ________________________ By ________________________
/s/Xxxxxxx Xxxxxx /s/Xxxx Xxxxxxx
By ________________________
/s/Xxxxxxx X. Xxxxxxxx,
President, U.S. Metals and Minerals, Inc.
26
INDEX OF SCHEDULES
Schedule 1.1 Control Group
Schedule 2.1(b) Certain Generally Accepted Accounting Principles
Schedule 4.2 USMetals' Shareholders
Schedule 4.5 Consents and Approvals
Schedule 4.10 Compliance with Law
Schedule 4.11 Property Rights
Schedule 4.13 Bank Accounts
Schedule 4.14 Properties
Schedule 4.17 Contracts
Schedule 4.18 Conflicts or Defaults
27
Schedule 1.1
Control Group
Xxxxxx Xxxxx 19,347,000 Shares Xxxxxxx Xxx 876,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0X0 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0X0
Xxx Xxxxx XX 00000 Xxx Xxxxx XX 00000
Xxxxxx Xxx 624,000 Shares Cash Xxxxx 373,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000 00000 Xxxxxxxxxx Xx. Xx. 000
Xxx Xxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx 130,000 Shares U.S. Metals And Minerals, Inc. 2,700,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx X. Xxxxxxxx, President
Xxx Xxxxx, XX 00000 0000 X. 00xx Xxxxx
Xxxxxxx, XX 00000
Schedule 2.1(b) Certain Generally Accepted Account Principles
USMetals, Inc. Financial Statement for Year End December 31, 2001
28
Schedule 4.2 USMetals' Shareholders
Xxxxxx Xxxxx
19,347,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxxx Xxx
624,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxx Xxxxxxxx
20,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxx Xxxxxxxx
80,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxxxx Xxxxxx
130,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
U.S. Metals And Minerals, Inc.
Xxxxxxx X. Xxxxxxxx, President
2,700,000 Shares
0000 X. 00xx Xxxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxxx
50,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxxxx Xxx
876,000 Shares
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx000
Xxx Xxxxx XX 00000
Cash Xxxxx
373,000 Shares
00000 Xxxxxxxxxx Xx. Xx. 000
Xxx Xxxxxxx, XX 00000
Schedule 4.5 Consents and Approvals
NONE
29
Schedule 4.10 Compliance with Law
California Franchise Tax. The Company has not conducted business in the State of
California during calendar year 2001 and is not required to register with
California as a foreign corporation at this time.
Authority for work performed on the claims group by Xxxxxxx & Associates:
"43 CFR Part 3800
Surface Management of Public Lands Under U.S. Mining Laws
45 FR 78902-78915
November 26, 1980
ACTION: Final rulemaking.
SUMMARY: The Federal Land Policy and Management Act of October 21,
1976, amended the mining laws by directing the Secretary of the
Interior, by regulation or otherwise, to take any action necessary to
prevent unnecessary or undue degradation of the lands. This final
rulemaking implements that requirement and among other things requires
mining claimants to complete reasonable reclamation on Federal lands
administered by the Bureau of Land Management during and upon
termination of exploration and mining activities under the mining laws.
This rulemaking pertains to locatable minerals such as gold, lead,
silver, uranium, etc. It does not pertain to coal, oil, gas, phosphate
or other leasable minerals or salable minerals such as sand and gravel.
EFFECTIVE DATE: January 1, 1981. ... The final rulemaking incorporates
three distinct levels of limitations dependent upon the level of mining
activity that the operator proposes to conduct on his/her area of
operations. For example, at the lowest level of activity, prospectors
or part-time miners who cause only negligible surface disturbance will
not need to contact the Bureau of Land Management. Except when he/she
is conducting mining operations on special category lands, an operator
who exceeds this negligible surface disturbance, but keeps his/her
disturbance to an area of five acres or less per year, will be required
to file only a notice. Notices will not require approval or bonding."
xxxx://xxx.xxx.xxx/xxx/xxxxx/XxxXxxxxxxx/xx_00000.xxxx
30
Schedule 4.10
Twin Peaks Mining Claims
Twin Peaks 141 Lode Mining Claims
COUNTY LOCATION COUNTY BLM
AMC NO. CLAIM NAME BOOK/PAGE DATE REC. DATE REC. DATE OWNER SECTION
------ ---------- --------- --------- ---------- ---------- ----- -------
275998 WG 1 1984/0366 10/22/1987 10/22/1987 11/12/1987 USMI 9
276003 WG 6 1984/0376 10/22/1987 10/22/1987 11/12/1987 USMI 16
276010 WG 13 1984/0390 10/22/1987 10/22/1987 11/12/1987 USMI 10
280058 XXXX 2011/0102 1/14/1988 1/21/1988 2/9/1988 USMI 7
280059 XXXX 1 2011/3100 1/14/1988 1/21/1988 2/9/1988 USMI 7
280060 ROSE 1 2011/0108 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 8
280061 ROSE 2 2011/0110 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 8
280062 ROSE 3 2011/0112 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 8
280063 ROSE 4 2011/0104 1/14/1988 1/21/1988 2/9/1988 USMI 7
280064 ROSE 5 2011/0106 1/14/1988 1/21/1988 2/9/1988 USMI 7
280065 ROSE 6 2011/0111 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 8
280066 ROSE 7 2011/0116 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 8
280067 XXXXXX 1 2006/0796 1/6/1988 1/21/1988 2/9/1988 USMI 4 & 9
280068 XXXXXX 2 2011/0218 1/14/1988 1/21/1988 2/9/1988 USMI 9
280069 XXXXXX 4 2011/0216 1/14/1988 1/21/1988 2/9/1988 USMI 9
280070 XXXXXX 5 2011/0214 1/14/1988 1/21/1988 2/9/1988 USMI 9
280071 XXXXXX 6 2006/0798 1/6/1988 1/21/1988 2/9/1988 USMI 4
280072 XXXXXX 7 2011/0230 1/14/1988 1/21/1988 2/9/1988 USMI 4
280073 XXXXXX 10 2011/0232 1/14/1988 1/21/1988 2/9/1988 USMI 4 & 9
280074 XXXXXX 11 2011/0240 1/14/1988 1/21/1988 2/9/1988 USMI 4
280075 XXXXXX 12 2011/0242 1/14/1988 1/21/1988 2/9/1988 USMI 4
280076 XXXXXX 13 2011/0234 1/14/1988 1/21/1988 2/9/1988 USMI 4 & 9
280077 XXXXXX 14 2011/0236 1/14/1988 1/21/1988 2/9/1988 USMI 3, 9 & 10
280078 XXXXXX 15 2011/0238 1/14/1988 1/21/1988 2/9/1988 USMI 3 & 9
280079 XXXXXX 16 2011/0220 1/14/1988 1/21/1988 2/9/1988 USMI 9
280080 XXXXXX 17 2011/0222 1/14/1988 1/21/1988 2/9/1988 USMI 9
280081 XXXXXX 18 2011/0244 1/14/1988 1/21/1988 2/9/1988 USMI 9
280082 XXXXXX 19 2011/0226 1/14/1988 1/21/1988 2/9/1988 USMI 9
280083 XXXXXX 20 2011/0228 1/14/1988 1/21/1988 2/9/1988 USMI 4
280084 XXXXXX 21 2011/0244 1/21/1988 1/21/1988 2/9/1988 USMI 4
280085 ALCAN 1 2011/0132 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280086 ALCAN 2 2011/0126 1/14/1988 1/21/1988 2/9/1988 USMI 8
280087 ALCAN 3 2011/0124 1/14/1988 1/21/1988 2/9/1988 USMI 8
280088 ALCAN 4 2011/0118 1/14/1988 1/21/1988 2/9/1988 USMI 8
280089 ALCAN 5 2011/0120 1/14/1988 1/21/1988 2/9/1988 USMI 8
280090 ALCAN 6 2011/0122 1/14/1988 1/21/1988 2/9/1988 USMI 8
280091 ALCAN 7 2011/0128 1/14/1988 1/21/1988 2/9/1988 USMI 8
31
Twin Peaks 141 Lode Mining Claims (Continued)
COUNTY LOCATION COUNTY BLM
AMC NO. CLAIM NAME BOOK/PAGE DATE REC. DATE REC. DATE OWNER SECTION
------ ---------- --------- --------- ---------- ---------- ----- -------
280092 ALCAN 8 2011/0134 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280093 ALCAN 9 2011/0136 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280094 ALCAN 10 2011/0146 1/14/1988 1/21/1988 2/9/1988 USMI 8
280095 ALCAN 11 2011/0138 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280096 ALCAN 12 2011/0140 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280097 ALCAN 13 2011/0130 1/14/1988 1/21/1988 2/9/1988 USMI 8
280098 ALCAN 27 2011/0328 1/14/1988 1/21/1988 2/9/1988 USMI 7 & 18
280099 ALCAN 52 2011/0144 1/14/1988 1/21/1988 2/9/1988 USMI 9
280100 ALCAN 53 2011/0142 1/14/1988 1/21/1988 2/9/1988 USMI 9
280101 ALCAN 54 2011/0292 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 9
280102 ALCAN 55 2011/0290 1/14/1988 1/21/1988 2/9/1988 USMI 8, 16 & 17
280103 ALCAN 56 2011/0288 1/14/1988 1/21/1988 2/9/1988 USMI 17
280104 ALCAN 57 2011/0198 1/14/1988 1/21/1988 2/9/1988 USMI 9
280105 ALCAN 58 2011/0200 1/14/1988 1/21/1988 2/9/1988 USMI 9
280106 ALCAN 59 2011/0202 1/14/1988 1/21/1988 2/9/1988 USMI 9
280107 ALCAN 60 2011/0204 1/14/1988 1/21/1988 2/9/1988 USMI 9
280108 ALCAN 61 2001/0206 1/14/1988 1/21/1988 2/9/1988 USMI 9
280126 ALCAN 83 2011/0278 1/14/1988 1/21/1988 2/9/1988 USMI 21
280127 ALCAN 84 2011/0280 1/14/1988 1/21/1988 2/9/1988 USMI 20 & 21
280128 ALCAN 85 2011/0254 1/14/1988 1/21/1988 2/9/1988 USMI 20
280129 ALCAN 94 2011/0274 1/14/1988 1/21/1988 2/9/1988 USMI 16
280130 ALCAN 95 2011/0276 1/14/1988 1/21/1988 2/9/1988 USMI 16 & 21
280131 ALCAN 104 2011/0260 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 21
280132 ALCAN 105 2011/0258 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 20
280133 ALCAN 106 2011/0256 1/14/1988 1/21/1988 2/9/1988 USMI 20
280134 ALCAN 113 2011/0248 1/14/1988 1/21/1988 2/9/1988 USMI 17
280135 ALCAN 114 2011/0250 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 20
280136 ALCAN 115 2011/0252 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 20
280137 ALCAN 117 2011/0296 1/14/1988 1/21/1988 2/9/1988 USMI 17
280138 ALCAN 118 2011/0294 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 20
280149 XXXXXX 2011/0314 1/14/1988 1/21/1988 2/9/1988 USMI 17
280150 SATURN 2011/0312 1/14/1988 1/21/1988 2/9/1988 USMI 8 & 17
280151 URANUS 2011/0310 1/14/1988 1/21/1988 2/9/1988 USMI 17
280152 JANUS 2011/0308 1/14/1988 1/21/1988 2/9/1988 USMI 17
280153 PLUTON 2011/0268 1/14/1988 1/21/1988 2/9/1988 USMI 4, 16 & 17
280154 ZUES 2011/0316 1/14/1988 1/21/1988 2/9/1988 USMI 17
280155 SCORPIO 2011/0304 1/14/1988 1/21/1988 2/9/1988 USMI 17
280156 PLUTO 2011/0282 1/14/1988 1/21/1988 2/9/1988 USMI 4 & 17
280157 VULCAN 2011/0284 1/14/1988 1/21/1988 2/9/1988 USMI 17
280158 MERCURY 2011/0286 1/14/1988 1/21/1988 2/9/1988 USMI 17
280159 JUPITER 2006/0800 1/6/1988 1/6/1988 2/9/1988 USMI 17
280160 NEPTUNE 2006/0804 1/6/1988 1/6/1988 2/9/1988 USMI 17
280161 VENUS 2006/0802 1/6/1988 1/6/1988 2/9/1988 USMI 17
280162 FIVE HOLE 2006/0806 1/6/1988 1/6/1988 2/9/1988 USMI 17
32
Twin Peaks 141 Lode Mining Claims (Continued)
COUNTY LOCATION COUNTY BLM
AMC NO. CLAIM NAME BOOK/PAGE DATE REC. DATE REC. DATE OWNER SECTION
------ ---------- --------- --------- ---------- ---------- ----- -------
280163 ROSE 2011/0148 1/14/1988 1/21/1988 2/9/1988 USMI 8
280164 SAME 2011/0246 1/14/1988 1/21/1988 2/9/1988 USMI 8
280165 BONANZA 2011/0264 1/14/1988 1/21/1988 2/9/1988 USMI 16 & 17
280166 X X XXXXXX 2011/0262 1/14/1988 1/21/1988 2/9/1988 USMI 17
280167 XXXXX 2011/0266 1/14/1988 1/21/1988 2/9/1988 USMI 16 & 17
280168 XXXXX 2011/0298 1/14/1988 1/21/1988 2/9/1988 USMI 17
280169 TEDDY 2011/0300 1/14/1988 1/21/1988 2/9/1988 USMI 17
280170 ORGA 2011/0302 1/14/1988 1/21/1988 2/9/1988 USMI 17
280171 JOVE 2011/0306 1/14/1988 1/21/1988 2/9/1988 USMI 17
280172 DAUGHTER 2011/0320 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 18
280173 MOON CHILD 2011/0322 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 18
280174 XXXX 2011/0270 1/14/1988 1/21/1988 2/9/1988 USMI 16
280175 CASH 2011/0324 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 18
280176 XXXXX 2011/0326 1/14/1988 1/21/1988 2/9/1988 USMI 17 & 18
280177 XXXXXXXX 2011/0318 1/14/1988 1/21/1988 2/9/1988 USMI 17
280178 XXXXX 2011/02072 1/14/1988 1/21/1988 2/9/1988 USMI 16
347949 SANTA XXXXX ONE 3481/490-491 9/11/1997 9/18/1997 9/23/1997 USMI 8
347950 SANTA XXXXX TWO 3481/492-493 9/11/1997 9/18/1997 9/23/1997 USMI 8
347951 SANTA XXXXX THREE 3481/494-495 9/11/1997 9/18/1997 9/23/1997 USMI 8
347952 SANTA XXXXX FOUR 3481/488-489 9/11/1997 9/18/1997 9/23/1997 USMI 8
347953 SANTA XXXXX FIVE 3481/486-487 9/11/1997 9/18/1997 9/23/1997 USMI 8
347954 SANTA XXXXX SIX 3481/484-485 9/11/1997 9/18/1997 9/23/1997 USMI 8
347955 SANTA XXXXX SEVEN 3481/482-483 9/11/1997 9/18/1997 9/23/1997 USMI 8
347956 SANTA XXXXX EIGHT 3481/480-481 9/11/1997 9/18/1997 9/23/1997 USMI 8
347957 SANTA XXXXX NINE 3481/478-479 9/11/1997 9/18/1997 9/23/1997 USMI 8
347958 SANTA XXXXX TEN 3481/476-477 9/11/1997 9/18/1997 9/23/1997 USMI 8
347959 SANTA XXXXX ELEVEN 3481/474-475 9/11/1997 9/18/1997 9/23/1997 USMI 8 & 17
347960 SANTA XXXXX 12 3481/472-473 9/11/1997 9/18/1997 9/23/1997 USMI 8 & 17
347961 SANTA XXXXX 13 3481/470-471 9/11/1997 9/18/1997 9/23/1997 USMI 5 & 8
347962 SANTA XXXXX 14 3481/468-469 9/11/1997 9/18/1997 9/23/1997 USMI 8
347963 SANTA XXXXX 15 3481/466-467 9/11/1997 9/18/1997 9/23/1997 USMI 8
347964 SANTA XXXXX 16 3481/464-465 9/11/1997 9/18/1997 9/23/1997 USMI 7 & 8
347965 SANTA XXXXX 17 3481/462-463 9/11/1997 9/18/1997 9/23/1997 USMI 7 & 8
347966 SANTA XXXXX 18 3481/460-461 9/11/1997 9/18/1997 9/23/1997 USMI 7 & 8
347967 SANTA XXXXX 19 3481/458-459 9/11/1997 9/18/1997 9/23/1997 USMI 7 & 8
347968 SANTA XXXXX 20 3481/456-457 9/11/1997 9/18/1997 9/23/1997 USMI 7, 8 & 17
347969 SANTA XXXXX 21 3481/454-455 9/11/1997 9/18/1997 9/23/1997 USMI 9
347970 SANTA XXXXX 22 3481/452-453 9/11/1997 9/18/1997 9/23/1997 USMI 9
347971 SANTA XXXXX 23 3481/450-451 9/11/1997 9/18/1997 9/23/1997 USMI 9
347972 SANTA XXXXX 24 3481/448/449 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347973 SANTA XXXXX 25 3481/446-447 9/11/1997 9/18/1997 9/23/1997 USMI 9
347974 SANTA XXXXX 26 3481/444-445 9/11/1997 9/18/1997 9/23/1997 USMI 9
347975 SANTA XXXXX 27 3481/442-443 9/11/1997 9/18/1997 9/23/1997 USMI 9
347976 SANTA XXXXX 28 3481/440-441 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347977 SANTA XXXXX 29 3481/438-439 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347978 SANTA XXXXX 30 3481/436-437 9/11/1997 9/18/1997 9/23/1997 USMI 16
347979 SANTA XXXXX 31 3481/434-435 9/11/1997 9/18/1997 9/23/1997 USMI 16
347980 SANTA XXXXX 32 3481/432-433 9/11/1997 9/18/1997 9/23/1997 USMI 16
33
Twin Peaks 141 Lode Mining Claims (Continued)
COUNTY LOCATION COUNTY BLM
AMC NO. CLAIM NAME BOOK/PAGE DATE REC. DATE REC. DATE OWNER SECTION
------ ---------- --------- --------- ---------- ---------- ----- -------
347981 SANTA XXXXX 33 3481/430-431 9/11/1997 9/18/1997 9/23/1997 USMI 16
347982 SANTA XXXXX 34 3481/428-429 9/11/1997 9/18/1997 9/23/1997 USMI 16
347983 SANTA XXXXX 35 3481/426-427 9/11/1997 9/18/1997 9/23/1997 USMI 16
347984 SANTA XXXXX 36 3481/424-425 9/11/1997 9/18/1997 9/23/1997 USMI 16
347985 SANTA XXXXX 37 3481/422-423 9/11/1997 9/18/1997 9/23/1997 USMI 16
347986 SANTA XXXXX 38 3481/420-421 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347987 SANTA XXXXX 39 3481/418-419 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347988 SANTA XXXXX 40 3481/416-417 9/11/1997 9/18/1997 9/23/1997 USMI 9 & 16
347989 SANTA XXXXX 41 3481/414-415 9/11/1997 9/18/1997 9/23/1997 USMI 9, 10 & 15
347990 SANTA XXXXX 42 3481/412-413 9/11/1997 9/18/1997 9/23/1997 USMI 9, 10, 15 & 16
347991 SANTA XXXXX 43 3481/410-411 9/11/1997 9/18/1997 9/23/1997 USMI 10 & 15
347992 SANTA XXXXX 44 3481/408-409 9/11/1997 9/18/1997 9/23/1997 USMI 15
Schedule 4.13 Bank Accounts
NONE
34
Schedule 4.17 Contracts
USMetals' Form of Executive Employment Agreement
FORM OF EXECUTIVE EMPLOYMENT AGREEMENT
THIS DOCUMENT represents an agreement entered into as of this 5th day of
January, 20__, by and between _____________________ of __________________
_____________________________, California ________ (hereinafter referred to as
the "Executive"), and Deco Tek, Inc., of ____________________
________________________________, ________ _________ (hereinafter referred to as
the "Company"), both of whom are hereinafter jointly referred to as the
"parties," and individually referred to as the "party."
W I T N E S S E T H
WHEREAS, the Company is engaged in the business of General Contracting,
Interior and exterior Design and Landscape Consulting and plans to enlarge its
business in other aspects of the general building and design business, and
WHEREAS, Executive desires to acquire an ownership of a portion of the
Company's stock, and
WHEREAS, Company wishes to employ the services of Executive as the
_____________ of the Company, and Executive wishes to be so engaged on the terms
and conditions hereinafter set forth,
NOW WHEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto do hereby agree as follows:
1. The Services of Executive:
1.1 Executive hereby agrees to provide the Company his services as the
________________ of the Company and to perform all acts and things necessary and
advisable to manage and conduct the present and future business of the Company.
1.2 At the invitation of the Board of Directors of the Company,
Executive agrees to serve as a director of the Board of Directors of the Company
for no additional compensation.
1.3 Executive hereby agrees to devote time and energy to the
performance of his duties as the _____________ of the Company subject to the
direction and policies of its Board of Directors.
2. Term of the Agreement:
The employment for which the Executive is hereby retained shall
commence on _________, ____, and shall continue for a one year term thereafter,
to be renewed each year by the mutual agreement of the parties. Unless written
communication is received from one party to the other in the last thirty (30)
days of each term to the contrary, this agreement shall be deemed to be
automatically renewed annually on the same terms and conditions as are set forth
herein.
35
3. Non-Disclosure:
Executive hereby promises and covenants not to disclose to anyone,
outside of the other employees, officers, and directors of the Company, any of
the trade secrets, office procedures, business methodology, business
relationships, customer lists, and other proprietary systems, procedures,
designs or other Company assets, including those owned or licensed by the
Company, for the term of this employment agreement or any extensions or renewals
thereof.
4. Compensation of the Executive:
Commencing with the date of _________, ____, and for the remainder of
the above term, and any extensions or renewals thereof, the Company shall pay to
the Executive at the end of each calendar month a salary of __________________
__________________________________ Dollars ($___________) or ____________ shares
per annum at the discretion of the Board of Directors.
5. Business Expenses:
In addition, the Company may reimburse the Executive for any reasonable
travel, hotel, or other expense incurred by the Executive at the request of the
Company while engaged in business on behalf of the Company, provided that the
Executive shall each month submit an expense statement for the approval and
payment of the Company.
6. Medical Insurance Benefits:
In addition, the Company shall make the Executive and his immediate
family a member of, or continue the existing membership in, at the sole expense
of the Company, any medical benefit insurance plan presently, or in the future,
offered to the executives of the Company.
7. Vacations and Holidays:
During each twelve (12) month period of the employment hereunder, the
Executive shall be entitled to a period of vacation time to be determined by the
Company. However, in no event shall the Executive be entitled to less than four
(4) weeks of vacation during each and every twelve (12) month period of the term
of this agreement, and any extensions and renewals hereof. Such vacation time
and all other legally recognized state and federal holidays falling within the
term of this agreement, shall be without any reduction in the salary or other
compensation to which the Executive is entitled under the terms hereof.
8. Life Insurance Benefits:
The Company shall provide for the executive, and for, at its sole cost
and expense, a Life Insurance Policy on the life of the Executive in an amount
of not less than ________________________________ Dollars ($__________). The
beneficiary(ies) under such policy shall be that person or persons designated by
the Executive.
36
9. Survival of this Agreement:
This agreement shall survive any reorganization, sale, merger,
acquisition, consolidation or other transfer of the Company or its stock, and
the enforceability of the terms and conditions, promises, and covenants
contained herein shall be unaffected thereby.
10. Separate Income:
The salary, reimbursement of expenses, and other benefits to be
provided by the Company, as enumerated herein, shall be apart, separate from,
and unaffected by any other income of the Executive from any profit sharing or
dividends to which the Executive shall be entitled as a shareholder in the stock
of the Company and its subsidiary(ies), if any.
11. Counterparts:
This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. Entire Agreement:
This agreement constitutes the entire understanding among the parties
pertaining to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
herewith. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution of this agreement, which are not set forth herein.
13. Further Assurances:
At any time, and from time to time, after the date hereof, each party
will execute such additional instruments, and take such action, as may be
reasonably requested by the other party to confirm or perfect any of the rights
or obligations of the parties set forth herein or to otherwise carry out the
intent and purposes of this agreement.
14. Waiver:
Any failure on the part of either party hereto to comply with any of
the obligations, agreements or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
15. Notices:
All notices and communications hereunder shall be made in writing and
shall be deemed to have been given if delivered in person or sent by prepaid,
first class, registered or certified mail, return receipt requested to each
party at his or its address as first hereinabove set forth, together with, in
the case of the Company a copy to:
________________________, Esq.
37
16. Severability:
The parties to this agreement hereby agree and affirm that none of the
above provisions is dependent upon the validity of all of the provisions, and if
any part of this agreement is deemed to be unenforceable, the balance of this
agreement shall remain in full force and effect.
17. No Effect on Other Agreements:
Nothing contained in this Executive Employment Agreement shall be
deemed to affect any of the rights, or obligations of either party set forth in
any other agreement with the Company to which either party is a signatory.
18. Amendment:
This agreement or any provision hereof, may not be changed, waived,
terminated or discharged except by means of a written supplemental instrument
signed by the party or parties against whom enforcement of the change waiver,
termination or discharge is sought.
19. Jurisdiction:
This agreement shall be governed by the laws of the State of Nevada.
20. Inurnment:
This agreement shall be binding upon the parties hereto, and inure to
the benefit of the parties, and, where applicable, their heirs, personal
representatives, successors in interest and assigns.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day
and year first hereinabove set forth.
Deco Tek, Inc.,
The "Company"
------------------------------
By:
------------------------------
By:
The "Executive"
------------------------------
By:
38
USMetals' Employee Compensation Plan
[Please refer to Exhibit 10.1 to this report.]
Assignment of Beneficial Interest
ASSIGNMENT OF
BENEFICIAL INTEREST
ASSIGNMENT made to become effective March 22, 2002 by U. S. Metals and
Minerals, Inc., an Arizona corporation (the "Assignor"), maintaining an office
at 0000 Xxxxx Xxxxxx-xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, to USMetals, Inc, a
Nevada corporation (the "Assignee"), maintaining an office at Xxxxx 000, 0000
Xxxx Xxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000, with reference to the following
facts:.
WITNESSETH:
WHEREAS, the Assignor is the holder of a certain beneficial interest in
and to those certain mining claims located in Yavapai County, Arizona and set
forth and described in Exhibit "A" hereof (the "Mining Claims," also, the
"Property" of the Assignor); and
WHEREAS, the Assignor, for its expectation of the valuable
consideration to become realized from the effect of the transaction contemplated
hereby, desires to assign its entire right, title and interest in and to the
Mining Claims to the Assignee; and
WHEREAS, the terms and provisions relative to the reservation of the
Mining Claims by the Bureau of Land Management do not restrict or prevent an
assignment of the Mining Claims;
NOW, THEREFORE, for ten dollars ($10.00) and other good and valuable
consideration, receipt of which is hereby acknowledged, the Assignor hereby
assigns to the Assignee its entire right, title, and interest in and to the
Mining Claims, including all profit or income to be derived from the Mining
Claims, to the Assignor.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Beneficial
Interest on the day, month, and year first above written pursuant to an
authorization to it granted by a duly adopted resolution of its Board of
Directors of even date herewith.
U. S. METALS AND MINERALS, INC.,
an Arizona corporation ("Assignor")
By: /s/Xxxxxxx X. Xxxxxxxx
Its: President
39
Exhibit "A"
List of Property of Assignor Transferred to Assignee
[Please see list of Twin Peaks 141 Lode Mining Claims above, included herein by
reference]
Schedule 4.18 Conflicts or Defaults
NONE
40
Exhibits
Closing Memorandum
MEMORANDUM OF CLOSING
A definitive closing (the "Closing") of that certain share exchange
transaction (the "Share Exchange") between USMetals, Inc., a Nevada corporation
(the "Exchangee") and USCorp, a Nevada corporation (the "Exchangor"), in
consideration of the premises, mutual warranties, representations, and covenants
set forth in that certain share exchange agreement between the Exchangor and
Exchangee dated March 14, 2002 (the "Share Exchange Agreement"), and in
consideration of the terms, conditions, acceptances, and provisions contained in
this memorandum of closing (the "Closing Memorandum"), each of the Exchangee and
the Exchangor acknowledges the Closing of the Share Exchange, to wit:
W-I-T-N-E-S-S-E-T-H:
1. The Exchangor and the Exchangee entered into that certain Share Exchange
Agreement dated March 14, 2002 together with the Exchangee's shareholders (the
"Shareholders"); whereby, the Shareholders agreed to exchange one share of their
common stock in Exchangee for one share of the Exchangor's common stock (as is
more fully described in that certain Share Exchange Agreement and, to a lesser
extent, for purposes of elucidation hereinbelow).
2. As of the date of the Share Exchange Agreement, the Exchangor was a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada, with full corporate power and authority to transact
business. The Exchangor is not in default or in violation of the performance,
observation, or fulfillment of any material provision of its Articles of
Incorporation, Bylaws, the Share Exchange Agreement, or any ancillary agreement
appurtenant to the Share Exchange.
3. As of the date of the Share Exchange Agreement, the Exchangee was a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada, with full corporate power and authority to transact
business. The Exchangee is not in default or in violation of the performance,
observation, or fulfillment of any material provision of its Articles of
Incorporation, Bylaws, the Share Exchange Agreement, or any ancillary agreement
appurtenant to the Share Exchange.
4. The Exchangor has properly obligated itself and satisfactorily performed each
term, provision, covenant, and condition of and to the Share Exchange Agreement.
5. The Exchangee has properly obligated itself and satisfactorily performed each
term, provision, covenant, and condition of and to the Share Exchange Agreement.
6. The Exchangor and the Exchangee have intended and continue to contend that
the Share Exchange qualifies as a tax-deferred reorganization under the
applicable subsection of Section 368 of the Internal Revenue Code of 1986, as
amended, with relevance to the principal transaction suggested by that certain
Share Exchange and resultant Share Exchange Agreement.
41
7. After notice having been properly given to any third-party required or
entitled to receive notice of the Share Exchange transaction, each of the
Exchangor and the Exchangee did not receive any objection or notice of dissent
from any such third-party to the satisfactory consummation of the Share Exchange
transaction, pursuant to the Share Exchange Agreement.
Therefore, in consideration of the above premises, the Parties (the
Exchangor and Exchangee when hereinafter referred to collectively) acknowledge
the occurrence of the following events.
Acceptances.
The Parties acknowledge and accept the terms of the Share Exchange,
specifically, the following events occurred without incident to successfully
consummate the Share Exchange in accordance with the terms and provisions of the
Share Exchange Agreement.
At the closing, the Parties acknowledge the occurrence of the following
events in pursuance of the objectives set forth in the Share Exchange and the
resultant Share Exchange Agreement:
1. The Closing of the Share Exchange, together with other transactions
contemplated by the Share Exchange, occurred at ten o' clock a.m., Pacific
Daylight Savings Time, on April 2, 2002, at the Hyatt Regency Suites Palm
Springs, commonly located at 000 Xxxxx Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxx, 00000. The overall Share Exchange transaction, including the
execution and delivery of the Share Exchange Agreement by the Exchangor, the
Exchangee, and the Shareholders was approved by the boards of directors of the
Exchangee, the Exchangor, and each Shareholder, respectively, during the
meeting.
2. Upon the terms and subject to the conditions set forth in this Agreement, and
in accordance with the provisions of Section 368 of the Code, the Shareholders
transferred all of their shares in the Exchangee to the Exchangor in exchange
for the Exchangor's transfer to the Shareholders of the Exchangor's shares, in
the amounts and as described in Section 2.1 of the Share Exchange Agreement.
Immediately after the occurrence of the Share Exchange event, the Shareholders
represented a part of the group of new shareholders the Exchangor, the
transaction of which is required to maintain an immediate non-tax liability
under the prevailing interpretation of Section 368(c) of the Code.
3. As the result of the Share Exchange transaction, each Of the Exchangee's
shares which was issued and outstanding immediately prior to the Closing was,
subject to the provisions of Section 2.2 of the Share Exchange Agreement, and
subject to the adjustments provided for in Section 2.1(B) and 3.3 of the Share
Exchange Agreement, was exchanged for (1) one of the Exchangor's shares.
4. At the Closing, each of the Shareholders were instructed to surrender their
certificates evidencing their shares in the Exchangee in the following manner
prescribed in the Share Exchange Agreement.
42
a. At the Closing, upon the delivery of each of the of the Exchangee's
share certificates evidencing all of the Of the Exchangee's shares owned by that
Shareholder, the Exchangor will cause its stock transfer agent to issue to each
Shareholder that number of the Exchangor's shares, which such Shareholder is
entitled to receive as described in Section 2.1 of the Share Exchange Agreement.
5. The representations and warranties of each of the Exchangor and the Exchangee
are valid and undisputed by each of the Parties hereunder.
6. The Share Exchange was consummated in accordance with the laws of the State
of Nevada, without objection by either of the Parties.
7. The Exchangee had no material liabilities or obligations that were not
disclosed to the Exchangor prior to the Closing of the Share Exchange.
8. The Exchangee had good and indefeasible claim to all of its assets,
specifically, the mining claims, which constitute all of the Exchangee's assets
now used in and necessary for the conduct of its business as presently
conducted. The Shareholders and the Exchangee acknowledged that all such
properties and miming claims will be owned free and clear of all mortgages,
pledges, liens, security interests, encumbrances, and restrictions of any nature
whatsoever, including without limitation: (a) rights or claims of parties in
possession; (b) easements or claims of easements; (c) encroachments, overlaps,
boundary line or water drainage disputes, or any other matters; (d) any lien;
(e) special tax or other assessments; (f) options to purchase, leases,
tenancies, or land contracts; (g) contracts, covenants, or reservations which
restrict the use of such properties; and (h) violations of any Applicable Laws
applicable to such properties, except for the paramount lien on the mining
claims by the United States government. The Shareholders and the Exchangee
confirmed that all such mining claims are usable for their current uses without
violating any Federal or state (Arizona) laws.
9. No investment banker, broker, finder, or other intermediary: (a) has been
retained by or is authorized to act on behalf of the Shareholders, the
Exchangor, or the Exchangee during the introduction or consummation of the Share
Exchange, or in the preparation of the Share Exchange Agreement.
10. There are no legal proceedings pending or threatened against the Exchangee.
43
NOW, at the unanimous direction of the Shareholders, the Board of
Directors of the Exchangee, and the Exchangor's Board of Directors, the Share
Exchange transaction has been successfully consummated in the manner set forth
in the Share Exchange Agreement, and witnessed by the execution of the
respective officers of the Exchangor and the Exchangee.
DATED: April 2, 2002
U. S. METALS AND MINERALS, INC.,
An Arizona corporation ("Assignor")
By: /s/Xxxxxxx X. Xxxxxxxx
----------------------
Its: President
USCORP
A Nevada corporation ("Assignee")
By: /s/Xxxxx Xxxxx
------------------
Its: President
44
