Exhibit 10.1
 
Agreement and Plan of Merger
 
THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of October 17,
2012, is by, between, and among Shoshone Silver/Gold Mining Company, an Idaho
corporation (“Shoshone”), Shoshone Acquisition Corp., a Colorado corporation and
wholly-owned subsidiary of Shoshone (the “Merger Sub”), Bohica Mining Corp., a
Colorado corporation (“Bohica”), and its shareholders, John R. Reynolds and
Frances A. Reynolds, individuals residing in Colorado (the
“Shareholders”).  Certain capitalized terms used in this Agreement are defined
in ARTICLE XII of this Agreement.
 
WITNESSETH:
 
WHEREAS, Shoshone desires to acquire Bohica, and Bohica desires to be acquired
by Shoshone through the merger of Merger Sub with and into Bohica, with Bohica
being the surviving entity pursuant to the terms hereinafter set forth (the
“Merger”);
 
WHEREAS, the respective Boards of Directors of Shoshone, Merger Sub, and Bohica
have approved and declared advisable the Merger upon the terms and subject to
the conditions of this Agreement, and in accordance with the Idaho Business
Corporation Act (the “Idaho Act”) in the case of Shoshone, and the Colorado
Business Corporation Act (the “Idaho Act”) in the case of Merger Sub and Bohica;
 
WHEREAS, the respective Boards of Directors of Shoshone, Merger Sub, and Bohica
have determined that the Merger is in furtherance of and consistent with their
respective business strategies and is in the best interest of their respective
shareholders;
 
WHEREAS, Shoshone as the sole shareholder of Merger Sub and the Shareholders as
the sole shareholders of Bohica have each approved this Agreement and the
Merger; and
 
WHEREAS, the parties hereto each intends, for federal income tax purposes, that
the Merger contemplated hereby constitute a reorganization pursuant to Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereto, intending to be legally
bound hereby, agree as follows:
 
ARTICLE I.
ADOPTION OF AGREEMENT
 
1.1       The Merger.  Upon the terms and subject to the satisfaction or waiver
of the conditions set forth in this Agreement, at the Effective Time (as defined
in Section 1.2 herein), in accordance with the relevant provisions of the
Colorado Act, Merger Sub shall be merged with and into Bohica , and Bohica shall
be the surviving corporation of the Merger (the “Surviving Corporation”). Upon
completion of the Merger, the existence of Merger Sub shall cease at the
Effective Time as a consequence of the Merger.
 
1.2       Effective Date and Time of Merger.  Upon the terms and subject to the
conditions hereof, as soon as practicable after the satisfaction or waiver of
the conditions set forth in ARTICLE VII and ARTICLE VIII of this Agreement, the
Certificate of Merger (the “Certificate of Merger”) shall be executed and
delivered to the Colorado Secretary of State in accordance with Section
7-111-104.5 of the
 

 
 

--------------------------------------------------------------------------------

 

Colorado Act.  The time of filing of the Certificate of Merger shall be the
“Effective Time,” and the date of such filing shall be the “Effective Date”.
 
1.3       Surviving Corporation.  Following the Merger, Bohica shall continue to
exist under and be governed by the laws of the State of Colorado and shall be
the Surviving Corporation.
 
1.4       Effect of Merger.  At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Colorado Act.  Without
limiting the generality of the foregoing, at the Effective Time, all the
property, rights, privileges, powers, and franchises of Bohica and Shoshone
shall vest in the Surviving Corporation.
 
1.5       Articles of Incorporation of Surviving Corporation.  The Articles of
Incorporation of Bohica, as in effect at the Effective Time, shall continue in
full force and effect, and shall be the Articles of Incorporation of the
Surviving Corporation.
 
1.6       Bylaws of Surviving Corporation.  The Bylaws of Bohica, as in effect
at the Effective Time, shall continue in full force and effect, and shall be the
Bylaws of the Surviving Corporation.
 
1.7       Directors and Officers of Surviving Corporation.  The directors of
Bohica immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.  The officers of Bohica
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
 
ARTICLE II.
PLAN OF MERGER
 
2.1       Conversion.
 
(a)      Conversion of Bohica Common Stock.  At the Effective Time each share of
Common Stock, no par value, of Bohica (the “Bohica Common Stock”), issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive 6,200 shares of common stock, par value $0.10 per share, of
Shoshone (the “Shoshone Common Stock”).  The total shares of Shoshone Common
Stock to be issued in the Merger shall not exceed 6,200,000 shares of Shoshone
Common Stock.  All converted shares of Bohica Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each certificate previously representing any such converted shares
shall thereafter represent the right to receive a certificate (or electronic
register) representing that number of shares of Shoshone Common Stock into which
such shares of Bohica Common Stock were converted in the Merger pursuant to this
Agreement (the “Shoshone Shares”).
 
(b)      Conversion of Merger Sub Common Stock.  Each share of common stock, no
par value, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be redeemed by the Surviving Entity for the sum of one
dollar ($1.00).
 
2.2       Manner of Conversion of Shares of Bohica Stock.  The manner of
converting shares of Bohica Common Stock into shares of Shoshone Common Stock in
accordance with Section 2.1 above shall be as follows:
 

 
2

--------------------------------------------------------------------------------

 

(a)      From and after the Effective Time, Shoshone (either directly or through
its transfer agent) shall act as exchange agent in effecting the conversion of
shares of Bohica Common Stock pursuant to Section 2.1 hereof.  Shoshone will
issue, or cause to be issued by the transfer agent, certificates representing
the Shoshone Shares issued to the Shareholders in connection with the
Merger.  SHOSHONE (either directly or through its transfer agent) shall cause
certificates representing the Shoshone Shares to be distributed to the
Shareholders, all in accordance with the provisions of this ARTICLE II.  The
shares which prior to the Effective Time represented outstanding shares of
Bohica Common Stock shall forthwith be canceled.
 
(b)      The Shareholders shall, for all purposes, be deemed to be shareholders
of Shoshone, as of the Effective Time, irrespective of whether he or she has
received his or her certificate representing shares of Shoshone Common Stock.
 
2.3       Restricted Stock.  The Shoshone Shares to be issued pursuant to the
Merger shall not have been registered and shall be characterized as “restricted
securities” under the federal securities laws, and under such laws such shares
may be resold without registration under the Securities Act only in certain
limited circumstances.  Each certificate evidencing Shoshone Common Stock to be
issued pursuant to the Merger shall bear an appropriate restrictive legend in
accordance with Rule 144 under the Securities Act.  Each of the Shareholders
shall provide at closing, an executed copy of the Representation Form attached
hereto as Exhibit A.
 
ARTICLE III.
CLOSING
 
3.1       Closing Date.  The closing of the Merger and the consummation of the
other transactions contemplated by this Agreement (the “Closing”) shall take
place at the offices of legal counsel for Bohica, at 1656 Reunion Avenue, Suite
250, South Jordan, Utah, at 10:00 a.m., mountain time, on October 31, 2012, or
as soon as practicable after the satisfaction or waiver of the conditions set
forth in ARTICLE VII and ARTICLE VIII of this Agreement, or such other date,
time and place as each of the parties hereto may otherwise agree in writing (the
“Closing Date”).  If a party hereto is not in attendance at the Closing, Closing
may be held by conference call and delivery of the stock certificate
representing the Shoshone Shares and signed agreements shall be via Federal
Express to the address set forth in this Agreement or such other address that
the party has provided to counsel for Shoshone.
 
3.2       Execution of Exchange Documents.  On the Closing Date, the parties
hereto shall cause the Merger to be consummated by filing the Certificate of
Merger with the Colorado Secretary of State, together with any required or
related certificates in such form as required by, and executed in accordance
with, the relevant provisions of the Colorado Act.  The Merger shall be
effective as of the Effective Time.
 
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BOHICA AND THE SHAREHOLDERS
 
Each of Bohica and the Shareholders, jointly and severally, represents and
warrants to Shoshone that all of the statements contained in this ARTICLE IV are
true as of the date of this Agreement (or, if made as of a specified date, as of
such date) except as otherwise provided in this Agreement.

4.1       Due Incorporation; Foreign Qualification.  Bohica is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado, with all requisite power and authority to own, lease and
operate its properties and to carry on its business as it is now being owned,
leased, operated and conducted.  True, correct and complete copies of the
Articles of Incorporation and Bylaws of Bohica have been delivered to
Shoshone.  Bohica does not have any wholly or partially owned
 

 
3

--------------------------------------------------------------------------------

 

subsidiaries and does not own any economic, voting or management interests in
any other Person.  The Shareholders are, and will be at Closing, the sole
shareholders of Bohica.  Bohica is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in or cause a Bohica Material Adverse Effect.
 
4.2       Due Authorization.  Each of Bohica and the Shareholders has full power
and authority to enter into this Agreement and the Certificate of Merger and to
consummate the transactions contemplated hereby and thereby.  The execution,
delivery and performance by Bohica of this Agreement have been duly and validly
approved and authorized by the Board of Directors of Bohica, and, other than the
Shareholder Approval, no other actions or proceedings on the part of Bohica are
necessary to authorize this Agreement, the Certificate of Merger, and the
transactions contemplated hereby and thereby.  Bohica and the Shareholders have
duly and validly executed and delivered this Agreement.  This Agreement
constitutes the legal, valid and binding obligation of Bohica and the
Shareholders, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or other laws from time to time in effect
which affect creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
 
4.3       Consents; Non-Contravention.
 
(a)      Except for the filing of the Certificate of Merger with the Colorado
Secretary of State, filings required by applicable federal and state securities
laws, and the requirement to obtain Shareholder Approval, no Permit, consent,
authorization or approval of, or filing or registration with, any Governmental
Authority or any other Person not a party to this Agreement, is necessary in
connection with the execution, delivery and performance by Bohica and the
Shareholders of this Agreement or the Articles Merger, or the consummation of
the transactions contemplated hereby or thereby, or for the lawful continued
operation by Shoshone following the Effective Time of the business currently
conducted by Bohica.
 
(b)      Except as would not result in or cause a Bohica Material Adverse
Effect, the execution, delivery and performance by Bohica of this Agreement and
the Certificate of Merger do not and will not (i) violate any Law; (ii) violate
or conflict with, result in a breach or termination of, or constitute a default
(or a circumstance which, with or without notice or lapse of time or both, would
constitute a default) under any material Contract or Permit; (iii) give any
third party any additional right (including a termination right) under, permit
cancellation of, or result in the creation of any Lien (except for any Lien for
taxes not yet due and payable) upon any of the assets or properties of Bohica
under any material Contract to which Bohica is a party or by which Bohica or any
of its assets or properties are bound; (iv) permit the acceleration of the
maturity of any indebtedness of Bohica or indebtedness secured by Bohica’s
assets or properties; (v) violate or conflict with any provision of the Articles
of Incorporation or Bylaws of Bohica; or (vi) result in the activation of any
anti-dilution rights or a reset or repricing of any debt or security instrument
of any creditor or equity holder of Bohica except as provided for in this
Agreement.
 
4.4       Capitalization.  The authorized capital stock of Bohica consists of
1,000 shares of Bohica Common Stock, all of which are outstanding and owned by
the Shareholders.  All of the issued and outstanding shares of Bohica Common
Stock are validly issued, fully paid and non-assessable and the issuance thereof
was not subject to preemptive rights or was issued in compliance therewith.  No
shares of Bohica’s capital stock are subject to preemptive rights or any other
similar rights or any Liens or encumbrances suffered or permitted by Bohica;
(ii) there are no outstanding debt securities; (iii) there are
 

 
4

--------------------------------------------------------------------------------

 

no outstanding shares of capital stock, options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of Bohica, or
contracts, commitments, understandings or arrangements by which Bohica is or may
become bound to issue additional shares of capital stock of Bohica or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of
capital stock of Bohica; (iv) there are no agreements or arrangements under
which Bohica is obligated to register the sale of any of its securities under
the Securities Act; (v) there are no outstanding securities of Bohica which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which Bohica is or may become
bound to redeem a security of Bohica; (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the shares as described in this Agreement; (vii)
Bohica does not have any stock appreciation rights plans or agreements or any
similar plan or agreement; and (viii) there is no dispute as to the class of any
shares of Bohica’s capital stock.
 
4.5       Liabilities.  There are no material liabilities of Bohica, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of Bohica, its agents or servants.  To the Knowledge of Bohica and
the Shareholders, there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of Bohica.
 
4.6       Taxes.  Bohica has applied for a federal employer identification
number.  No tax returns of any kind are required to be filed as of the date of
this Agreement.
 
4.7       Compliance.  Neither Bohica nor the Shareholders: (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by Bohica
or the Shareholders under), nor has Bohica or the Shareholders received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it or he is a party or by which it or he or any of their properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator or
governmental body or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the mortgage industry, except in each case as
could not have or reasonably be expected to result in or cause a Bohica Material
Adverse Effect.
 
4.8       Title to Assets.  Bohica has good and marketable title in fee simple
to all real property owned by it, good and marketable title in all personal
property owned by it, and good and marketable possessory title to all mineral
claims held by it, in each case that are material to the business of Bohica and
in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property or mineral claims and do not materially
interfere with the use made and proposed to be made of such property or claims
by Bohica and Liens for the payment of federal, state or other taxes or
assessments, the payment of which is neither delinquent nor subject to
penalties.  Any real property and facilities held under lease by Bohica are held
by it under valid, subsisting and enforceable leases with which Bohica is in
compliance.
 
4.9       Litigation.  There are no actions, suits, arbitrations, regulatory
proceedings or other litigation, proceedings or governmental investigations
pending or, to the Knowledge of Bohica and the Shareholders, threatened against
Bohica or any of its officers or directors in their capacity as such, or any of
its properties, mineral claims, or businesses, and neither Bohica nor the
Shareholders has any Knowledge of any facts or circumstances which may
reasonably be likely to give rise to any of the foregoing.  Neither Bohica nor
any Shareholder is subject to any order, judgment, decree, injunction,
 

 
5

--------------------------------------------------------------------------------

 

stipulation or consent order of or with any court or other Governmental
Authority.  Neither Bohica nor any Shareholder has entered into any agreement to
settle or compromise any proceeding pending or threatened in writing against it
which has involved any obligation for which Bohica or its properties or business
has any continuing obligation.  There are no claims, actions, suits,
proceedings, or investigations pending or, to the Knowledge of Bohica or the
Shareholders, threatened by or against Bohica or the Shareholders with respect
to this Agreement, the Certificate of Merger, or in connection with the
transactions contemplated hereby or thereby, and Bohica and the Shareholders
have no reason to believe there is a valid basis for any such claim, action,
suit, proceeding or investigation.
 
4.10     Brokers.  Neither Bohica or the Shareholders nor any of their agents or
representatives has retained any finder, broker, agent, financial advisor or
other intermediary in connection with the transactions contemplated by this
Agreement.
 
4.11     Reorganization Treatment.
 
(a)      Assets.  At the Effective Time, Bohica will hold at least 90 percent of
the fair market value of its net assets and at least 70 percent of the fair
market value of its gross assets held immediately prior to the Effective
Time.  For purposes of this representation, amounts used by Bohica or the
Surviving Corporation to pay Merger expenses, in each case, will be treated as
constituting assets of Bohica immediately prior to the Effective Time.
 
(b)      Business.  Bohica currently conducts a business.  Such business is
Bohica’s “historic business” within the meaning of Treasury Regulations Section
1.368-1(d), and no assets of Bohica have been sold, transferred, or otherwise
disposed of that would prevent SHOSHONE and Shoshone from continuing the
“historic business” of Bohica or from using a “significant portion” of Bohica’s
“historic business assets” in a business following the Merger, as such terms are
used in Treasury Regulations Section 1.368-1(d).
 
(c)      Investment Company.  Bohica is not an “investment company” as defined
in Sections 368(a)(2)(F)(iii) and (iv) of the Code.
 
(d)      Redemptions and Distributions.  Neither Bohica nor any person related
to Bohica within the meaning of Treasury Regulations Sections 1.368-1(e)(3),
(e)(4) and (e)(5) has purchased, redeemed or otherwise acquired, or made any
distributions with respect to, any of Bohica’s stock prior to or in
contemplation of the Merger, or otherwise as part of a plan of which the Merger
is a part.
 
(e)      Dividends.  At the Effective Time, there will be no accrued but unpaid
dividends on Bohica Common Stock.
 
(f)      Control.  In the Merger, stock of Bohica representing “control” of
Bohica (within the meaning of Section 368(c) of the Code) will be exchanged
solely for “voting stock” of Shoshone (within the meaning of Sections
368(a)(1)(B) and (2)(E) of the Code).
 
4.12     Board Approval.  The Board of Directors of Bohica, by unanimous written
consent, duly adopted resolutions: (a) approving and declaring advisable this
Agreement, the Merger and the transactions contemplated hereby; (b) determining
that the terms of the Merger are fair to and in the best interests of Bohica and
its shareholders; (c) recommending that the shareholders of Bohica approve and
adopt this Agreement and the Merger; and (d) adopting this Agreement, which
resolutions have not been modified, supplemented or rescinded and remain in full
force and effect.
 

 
6

--------------------------------------------------------------------------------

 

4.13     Disclosure.  All of the disclosure furnished by or on behalf of Bohica
or the Shareholders to Shoshone regarding Bohica, its business and the
transactions contemplated hereby, including the disclosure schedules to this
Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
 
ARTICLE V.
REPRESENTATIONS OF SHOSHONE AND Shoshone
 
Shoshone represents and warrants to Bohica and the Shareholders that all of the
statements contained in this ARTICLE V are true as of the date of this Agreement
(or, if made as of a specified date, as of such date) except as otherwise
provided in this Agreement.
 
5.1       Due Incorporation; Foreign Qualification.  Shoshone is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Idaho, with all requisite power and authority to own, lease and operate
its properties and to carry on its business as it is now being owned, leased,
operated and conducted.  Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado.  True,
correct and complete copies of the Articles of Incorporation and Bylaws of
Shoshone, and Merger Sub have been delivered to Bohica and the
Shareholders.  Shoshone does not have any wholly or partially owned
subsidiaries.  Shoshone is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in or cause a Shoshone Material Adverse Effect.
 
5.2       Due Authorization.  Each of Shoshone and Merger Sub has full power and
authority to enter into this Agreement and the Certificate of Merger, and to
consummate the transactions contemplated hereby and thereby.  The execution,
delivery and performance by Shoshone and Merger Sub of this Agreement have been
duly and validly approved and authorized by the Board of Directors of each
entity, and, other than the Shareholder Approval, no other actions or
proceedings on the part of Shoshone, or Merger Sub are necessary to authorize
this Agreement, the Certificate of Merger, and the transactions contemplated
hereby and thereby.  Shoshone and Merger Sub have duly and validly executed and
delivered this Agreement.  This Agreement constitutes the legal, valid and
binding obligation of Shoshone and Merger Sub, enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other
laws from time to time in effect which affect creditors’ rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
 
5.3       Consents; Non-Contravention.
 
(a)      Except for the filing of the Certificate of Merger with the Colorado
Secretary of State, filings required by applicable federal and state securities
laws, and the requirement to obtain Shareholder Approval, no Permit, consent,
authorization or approval of, or filing or registration with, any Governmental
Authority or any other Person not a party to this Agreement, is necessary in
connection with the execution, delivery and performance by Shoshone and Merger
Sub of this Agreement or the Articles Merger, or the consummation of the
transactions contemplated hereby or thereby.
 
(b)  Except as would not result in or cause a Shoshone Material Adverse Effect,
the execution, delivery and performance by Shoshone and Merger Sub of this
Agreement and the Certificate
 

 
7

--------------------------------------------------------------------------------

 

of Merger do not and will not (i) violate any Law; (ii) violate or conflict
with, result in a breach or termination of, or constitute a default (or a
circumstance which, with or without notice or lapse of time or both, would
constitute a default) under any material Contract or Permit; (iii) give any
third party any additional right (including a termination right) under, permit
cancellation of, or result in the creation of any Lien (except for any Lien for
taxes not yet due and payable) upon any of the assets or properties of Shoshone
or Merger Sub under any material Contract to which Shoshone or Merger Sub is a
party or by which Shoshone, Merger Sub or any of their assets or properties are
bound; (iv) permit the acceleration of the maturity of any indebtedness of
Shoshone or Merger Sub or indebtedness secured by such entity’s assets or
properties; (v) violate or conflict with any provision of the Articles of
Incorporation or Bylaws of Shoshone or Merger Sub; or (vi) result in the
activation of any anti-dilution rights or a reset or repricing of any debt or
security instrument of any creditor or equity holder of Shoshone or Merger Sub,
except as provided for in this Agreement.
 
5.4  Capitalization.  The authorized capital stock of Shoshone consists of
200,000,000 shares of Shoshone Common Stock.  As of the date of this Agreement,
there are issued and outstanding 53,221,704 shares of Shoshone Common
Stock.  Shoshone is the sole owner of record and sole beneficial owner  (as
defined in Rule 13d-3 under the Exchange Act) of all of the outstanding equity
securities of Merger Sub.  All of the issued and outstanding shares of Shoshone
Common Stock are validly issued, fully paid and non-assessable and the issuance
thereof was not subject to preemptive rights or was issued in compliance
therewith.  Except as set forth in the SEC Reports, no shares of Shoshone’s
capital stock are subject to preemptive rights or any other similar rights or
any Liens or encumbrances suffered or permitted by Shoshone; (ii) there are no
outstanding debt securities; (iii) there are no outstanding shares of capital
stock, options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of Shoshone, or contracts, commitments,
understandings or arrangements by which Shoshone is or may become bound to issue
additional shares of capital stock of Shoshone or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of Shoshone; (iv) there are no agreements or arrangements under which
Shoshone is obligated to register the sale of any of its securities under the
Securities Act; (v) there are no outstanding securities of Shoshone which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which SHOSHONE is or may become
bound to redeem a security of Shoshone; (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the shares as described in this Agreement; (vii)
Shoshone does not have any stock appreciation rights plans or agreements or any
similar plan or agreement; and (viii) there is no dispute as to the class of any
shares of Shoshone’s capital stock.
 
5.5  SEC Reports; Financial Statements.  Shoshone has filed all reports,
schedules, forms, statements and other documents required to be filed by
Shoshone under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as Shoshone was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
consolidated financial statements of Shoshone included in the SEC Reports (the
“Shoshone Financial Statements”) comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing.  Such financial statements have been
prepared in accordance with U.S. Generally Accepted Accounting
 

 
8

--------------------------------------------------------------------------------

 

Principles (except (i) as may be otherwise indicated in the Shoshone Financial
Statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of Shoshone on a consolidated basis as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.
 
5.6  Liabilities.  Except as set forth in Schedule 5.6, there are no material
liabilities of Shoshone, whether accrued, absolute, contingent or otherwise,
which arose or relate to any transaction of Shoshone, its agents or servants
occurring prior to the period covered by the Shoshone Financial Statements which
are not disclosed by or reflected in the Shoshone Financial Statements.  To the
Knowledge of Shoshone, there are no circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may hereafter give rise
to liabilities, except in the normal course of business of Shoshone.  Merger Sub
has no material liabilities, whether accrued, absolute, contingent or otherwise.
 
5.7  Material Changes; Undisclosed Events, Liabilities or Developments.  Since
the period covered by the Shoshone Financial Statements, except as specifically
disclosed in the SEC Reports or  Schedule 5.7, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected,
individually or in the aggregate, to result in or cause a Shoshone Material
Adverse Effect, (ii) Shoshone has not incurred any liabilities (contingent or
otherwise) other than trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, (iii) Shoshone has
not altered its method of accounting, (iv) Shoshone has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) Shoshone has not issued any equity securities to any
officer, director or Affiliate.  Except for the transactions contemplated by
this Agreement or as set forth on Schedule 5.7, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably
expected to occur or exist with respect to Shoshone or its business, prospects,
properties, operations, assets or financial condition that would result in or
cause a Shoshone Material Adverse Effect.  Shoshone has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any
bankruptcy or similar law nor does Shoshone have any knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy or similar
proceedings.  Except for this Agreement and the transactions contemplated
hereby, Merger Sub has conducted no material business operations since its
inception.
 
5.8  Taxes.  All federal, state, foreign, county, and local income, withholding,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by Shoshone, and there are no unpaid taxes which are, or could become a
Lien on the properties and assets of Shoshone, except as provided for in the
Shoshone Financial Statements, or have been incurred in the normal course of
business of Shoshone since that date.  All tax returns of any kind required to
be filed have been filed and the taxes paid.  There are no disputes as to taxes
of any nature payable by Shoshone.
 
5.9  Environmental Laws.  Shoshone (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii)
has received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its business; and (iii) is in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the three foregoing cases, the failure to so comply would have
or cause, individually or in the aggregate, a Shoshone Material Adverse Effect.
 

 
9

--------------------------------------------------------------------------------

 

5.10     Compliance.  Shoshone: (i) is not in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by Shoshone under), nor has Shoshone
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it or he is a party or by which it or he or any of their
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator
or governmental body or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the mortgage industry, except in each case as
could not have or reasonably be expected to result in or cause a Shoshone
Material Adverse Effect.
 
5.11     Regulatory Permits.  Shoshone possess all certificates, authorizations
and Permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct its business as described in the SEC
Reports, except where the failure to possess such Permits could not reasonably
be expected to result in or cause a Shoshone Material Adverse Effect (“Shoshone
Material Permits”), and Shoshone has not received any notice of proceedings
relating to the revocation or modification of any Shoshone Material Permit.
 
5.12     Title to Assets.  Shoshone has good and marketable title in fee simple
to all real property owned by it, good and marketable possessory title to all
mining claims, and good and marketable title in all personal property owned by
it that is material to the business of Shoshone, as applicable, in each case
free and clear of all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by such entity and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under lease by
Shoshone are held by it under valid, subsisting and enforceable leases with
which such entity is in compliance.  Merger Sub has not material assets.
 
5.13     Patents and Trademarks.  Shoshone has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights and similar rights necessary or material for use in
connection with its business and which the failure to so have could have or
cause a Shoshone Material Adverse Effect (collectively, the “Shoshone
Intellectual Property Rights”).  Shoshone has not received a notice (written or
otherwise) that any of the Shoshone Intellectual Property Rights used by
Shoshone violates or infringes upon the rights of any Person.  To the knowledge
of Shoshone, all such Shoshone Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the Shoshone
Intellectual Property Rights.  Shoshone has taken reasonable security measures
to protect the secrecy, confidentiality and value of all of its intellectual
properties, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have or cause a Shoshone Material Adverse
Effect.
 
5.14     Insurance.  Shoshone is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which Shoshone is engaged.  Shoshone has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
 
5.15     Litigation.  There are no actions, suits, arbitrations, regulatory
proceedings or other litigation, proceedings or governmental investigations
pending or, to the Knowledge of Shoshone, threatened against Shoshone or Merger
Sub or any of their officers or directors in their capacity as such, or any of
their properties or businesses, and Shoshone has no Knowledge of any facts or
circumstances which
 

 
10

--------------------------------------------------------------------------------

 

may reasonably be likely to give rise to any of the foregoing.  Neither Shoshone
nor Merger Sub is subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other Governmental
Authority.  Neither Shoshone nor Merger Sub has entered into any agreement to
settle or compromise any proceeding pending or threatened in writing against it
which has involved any obligation for which either Shoshone or its properties or
business has any continuing obligation.  There are no claims, actions, suits,
proceedings, or investigations pending or, to the Knowledge of Shoshone,
threatened by or against either Shoshone or Merger Sub with respect to this
Agreement, the Certificate of Merger, or in connection with the transactions
contemplated hereby or thereby, and Shoshone has no reason to believe there is a
valid basis for any such claim, action, suit, proceeding or investigation.
 
5.16     Labor Relations.  No material labor dispute exists or, to the knowledge
of Shoshone, is imminent with respect to any of the employees of Shoshone which
could reasonably be expected to result in or cause a Shoshone Material Adverse
Effect.  None of Shoshone’s employees is a member of a union that relates to
such employee’s relationship with Shoshone, and Shoshone is not a party to a
collective bargaining agreement, and Shoshone reasonably believes that its
relationship with its employees is good.  No executive officer, to the Knowledge
of Shoshone, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject Shoshone to any
liability with respect to any of the foregoing matters.  Shoshone is in material
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have or
cause a Shoshone Material Adverse Effect.  Merger Sub has no employees and has
had no employees since its inception.
 
5.17     Brokers.  Neither Shoshone nor Merger Sub nor any of their agents or
representatives has retained any finder, broker, agent, financial advisor or
other intermediary in connection with the transactions contemplated by this
Agreement.
 
5.18     Reorganization Treatment.
 
(a)      Intention Regarding Shoshone.  Shoshone has no plan or intention: (i)
to liquidate Bohica; (ii) to merge Bohica into another corporation; (iii) to
sell or otherwise dispose of any shares of stock of Bohica pursuant to this
Agreement, except for transfers and successive transfers described in Treasury
Regulation Section 1.368-2(k) or transfers and successive transfers to one or
more corporations controlled in each transfer by the transferor corporation
(within the meaning of Section 368(c) of the Code); or (iv) to cause Bohica to
sell or otherwise dispose of any of its assets, except for (w) dispositions made
in the ordinary course of business, (x) transfers and successive transfers
described in Treasury Regulation Section 1.368-2(k) or transfers and successive
transfers to one or more corporations controlled in each transfer by the
transferor corporation (within the meaning of Section 368(c) of the Code), (y)
dispositions after which Bohica would continue to hold the amount of assets set
forth in Section 4.15(a) following the Merger (assuming the correctness of the
representation set forth in Section 4.11), or (z) transfers to partnerships that
satisfy the provisions of Treasury Regulation Section 1.368-1(d)(4)(iii)(B).
 
(b)      Intention Regarding Shoshone Common Stock.  Neither Shoshone nor any
Person related to Shoshone within the meaning of Treasury Regulation Sections
1.368-1(e)(3), (e)(4) and (e)(5) has any plan or intention to repurchase, redeem
or otherwise acquire any of the stock of Shoshone issued to the Shareholders
pursuant to this Agreement following the Merger.  Other than pursuant to this
Agreement, neither Shoshone nor any Person related to Shoshone within the
meaning of
 

 
11

--------------------------------------------------------------------------------

 

Treasury Regulation Sections I.368-1(e)(3), (e)(4) and (e)(5) has acquired any
Bohica Common Stock in contemplation of the Merger, or otherwise as part of a
plan of which the Merger is a part.
 
(c)  Control.  Prior to the Merger, Shoshone will be in control of Merger Sub,
and following the Merger, Shoshone will be in control of the Surviving
Corporation, within the meaning of Section 368(c) of the Code.  Shoshone has no
plan or intention to cause the Surviving Corporation, after the Effective Time,
to issue additional shares of stock that would result in Shoshone losing control
of the Surviving Corporation within the meaning of Section 368(c) of the Code.
 
(d)  Business.  Following the Merger, Shoshone intends to continue the historic
business of Bohica (or, alternatively, if Bohica has more than one line of
business, intends to continue at least one significant line of Bohica’s historic
business) or use a significant portion of Bohica’s historic business assets in a
business, in a manner consistent with Treasury Regulation Section 1.368-1(d).
 
(e)  Investment Company.  Shoshone is not an “investment company” as defined in
Sections 368(a)(2)(F)(iii) and (iv) of the Code.
 
(f)      Dividends.  At the Effective Time, there will be no accrued but unpaid
dividends on any stock of Shoshone.
 
5.19     Board Approval.  The Boards of Directors of Shoshone and Merger Sub, by
a special meeting duly called and held or by unanimous written consent, duly
adopted resolutions: (a) approving and declaring advisable this Agreement, the
Merger and the transactions contemplated hereby; (b) determining that the terms
of the Merger are fair to and in the best interests of Shoshone and Merger Sub
and their respective shareholders; (c) recommending that the shareholders of
Merger Sub approve and adopt this Agreement and the Merger; and (d) adopting
this Agreement, which resolutions have not been modified, supplemented or
rescinded and remain in full force and effect.
 
5.20     Disclosure.  All of the disclosure furnished by or on behalf of
Shoshone to either Bohica or the Shareholders regarding Shoshone or Merger Sub,
their businesses and the transactions contemplated hereby, including the
disclosure schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
 
ARTICLE VI.
COVENANTS
 
6.1  Implementing Agreement.  Subject to the terms and conditions hereof, each
party hereto shall use its or his commercially reasonable efforts to take, or
cause to be taken, all appropriate action required of it to consummate and make
effective the transactions contemplated by this Agreement.
 
6.2  Access to Information and Facilities; Confidentiality.
 
(a)  From and after the date of this Agreement, Bohica and the Shareholders
shall allow Shoshone and their representatives access during normal business
hours to all of the facilities, properties, books, Contracts, commitments and
records of Bohica and shall make the officers and employees of Bohica available
to Shoshone and their representatives as either party or its representatives
shall from time to time reasonably request.  Shoshone and their representatives
shall be furnished with any and all information concerning Bohica, which
Shoshone or its representatives reasonably request and can be obtained by Bohica
without unreasonable effort or expense.
 

 
12

--------------------------------------------------------------------------------

 

(b)  From and after the date of this Agreement, Shoshone shall allow Bohica and
the Shareholders, and their representatives access during normal business hours
to all of the facilities, properties, books, Contracts, commitments and records
of Shoshone and Merger Sub and shall make the officers and employees of Shoshone
and Merger Sub available to Bohica, the Shareholders and their representatives
as Bohica, the Shareholders or their representatives shall from time to time
reasonably request.  Bohica, the Shareholders and their representatives shall be
furnished with any and all information concerning Shoshone and Merger Sub which
Bohica, the Shareholders or their representatives reasonably request and can be
obtained by Shoshone or Merger Sub without unreasonable effort or expense.
 
(c)  With respect to the information disclosed pursuant to this Section 6.2, the
parties shall maintain the confidentiality of any material non-public
information furnished by the other Party.
 
6.3  Preservation of Business.  Subject to the terms of this Agreement, from the
date of this Agreement until the Closing Date, each of Bohica, Shoshone, and
Merger Sub, as the case may be, shall operate only in the ordinary and usual
course of business consistent with past practice, and shall use reasonable
commercial efforts to: (a) preserve intact its present business organization, as
the case may be; (b) preserve the good and advantageous relationships of Bohica
and Shoshone, as the case may be, with employees and other Persons material to
the operation of their respective businesses; and (c) not permit any action or
omission within its control which would cause any of the representations or
warranties of Bohica, the Shareholders, or Shoshone, as the case may be,
contained herein to become inaccurate in any material respect or any of the
covenants of Bohica, the Shareholders, or Shoshone, as the case may be, to be
breached in any material respect.
 
6.4  Conduct of Business.  Neither Shoshone, Merger Sub, nor Bohica shall engage
in any extraordinary transactions affecting the transactions contemplated by
this Agreement without the other party or parties’ prior written consent,
including, without limitation the following:  (i) the Shareholders shall not
transfer or dispose of their shares of Bohica, grant any options or rights to
such shares, or in any way encumber the shares; (ii) Bohica shall not issue any
equity shares or rights to purchase or instruments convertible into equity
shares of Bohica; (iii) neither Shoshone, Merger Sub, nor Bohica shall pay any
dividends or redeem any securities; (iv) neither Shoshone, Merger Sub, nor
Bohica shall borrow any funds or incur any debt or other obligations; and (v) no
party hereto shall take any action which would have a material negative effect
on the proposed Merger.
 
6.5  Certain Notices.  From and after the date of this Agreement until the
Effective Time, each party hereto shall promptly notify the other party hereto
of: (a) the occurrence, or non-occurrence, of any event that would be likely to
cause any condition to the obligations of any party to effect the Merger and the
other transactions contemplated by this Agreement not to be satisfied; or (b)
the failure of Bohica, Shoshone, or Merger Sub, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it pursuant to this Agreement which would reasonably be expected to
result in any condition to the obligations of any party to effect the Merger and
the other transactions contemplated by this Agreement not to be satisfied;
provided, however, that the delivery of any notice pursuant to this Section 6.5
shall not cure any breach of any representation or warranty requiring disclosure
of such matter prior to the date of this Agreement or otherwise limit or affect
the remedies available hereunder to the party receiving such notice.
 
6.6  Consents and Approvals.
 
(a)  Each of Bohica and the Shareholders shall use commercially reasonable
efforts to obtain all consents, approvals, certificates and other documents
required in connection with the performance by it or them of this Agreement and
the consummation of the transactions
 

 
13

--------------------------------------------------------------------------------

 

contemplated hereby.  Bohica and the Shareholders shall make all filings,
applications, statements and reports to all Governmental Authorities and other
Persons that are required to be made prior to the Closing Date by or on behalf
of Bohica or the Shareholders, as applicable, pursuant to Applicable Law in
connection with this Agreement and the transactions contemplated hereby.
 
(b)  Each of Shoshone and Merger Sub shall use commercially reasonable efforts
to obtain all consents, approvals, certificates and other documents required in
connection with the performance by it of this Agreement and the consummation of
the transactions contemplated hereby.  Shoshone and Merger Sub shall make all
filings, applications, statements and reports to all Governmental Authorities
and other Persons that are required to be made prior to the Closing Date by or
on behalf of Shoshone, or Merger Sub pursuant to Applicable Law or otherwise in
connection with this Agreement and the transactions contemplated hereby.
 
6.7  Shareholder Approval.  The Shareholders shall provide Shareholder Approval
of the Merger and this Agreement, and the transactions contemplated thereby, as
soon as practicable following the date of this Agreement.  Merger Sub shall
provide Shareholder Approval of the Merger and this Agreement, and the
transactions contemplated thereby, as soon as practicable following the date of
this Agreement.
 
6.8  Supplemental Information.  From time to time prior to the Closing, Bohica
and the Shareholders, on the one hand, and Shoshone and Merger Sub, on the other
hand, shall promptly disclose in writing to the other any matter hereafter
arising which, if existing, occurring or known at the date of this Agreement
would have been required to be disclosed to the other parties hereto or which
would render inaccurate any of the representations, warranties or statements set
forth in ARTICLE IV and ARTICLE V, respectively, hereof.
 
6.9  Tax-Free Reorganization Treatment.
 
(a)  Bohica, the Shareholders, Shoshone, and Merger Sub shall use their
commercially reasonable efforts, and cause their respective Affiliates to use
their commercially reasonable efforts, to take or cause to be taken any action
necessary for the Merger to qualify as a reorganization within the meaning of
Section 368(a) of the Code.  Neither Bohica, the Shareholders, Shoshone, nor
Merger Sub shall, nor shall they permit any of their respective representatives
or Affiliates to, take or cause to be taken any action that could reasonably be
expected to prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
 
(b)  This Agreement is intended to constitute, and the parties hereto hereby
adopt this Agreement as, a “plan of reorganization” within the meaning Treasury
Regulation Sections 1.368-2(g) and 1.368-3(a).  Each of Bohica, the
Shareholders, Shoshone, and Merger Sub shall report the Merger as
a reorganization within the meaning of Section 368 of the Code, unless otherwise
required pursuant to a “determination” within the meaning of Section 1313(a) of
the Code.
 
(c)  Notwithstanding the foregoing, neither Shoshone or Merger Sub, nor any
representative of, or legal counsel or consultant for, Shoshone or Merger Sub
warrants that the Merger will qualify as a tax-free reorganization.
 
6.10     Exclusive Dealing.  From the date of this Agreement until Closing or
termination hereof pursuant to Section 11.1, neither Bohica nor the Shareholders
shall, directly or indirectly, through any representative or otherwise, solicit,
negotiate with or in any manner encourage, discuss or accept any proposal of any
other person relating to the acquisition of Bohica, shares of its capital stock
purchased
 

 

 
14

--------------------------------------------------------------------------------

 

from Bohica or the Shareholders, or its assets or business, in whole or in part,
whether through direct purchase, merger, consolidation, or other business
combination.
 
ARTICLE VII.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SHOSHONE, Shoshone AND MERGER SUB
 
The obligations of Shoshone and Merger Sub under this Agreement are subject to
the satisfaction (or waiver by Shoshone and Merger Sub) of the following
conditions precedent on or before the Closing Date:
 
7.1  Representations and Warranties.  Without supplementation after the date of
this Agreement, the representations and warranties of Bohica and the
Shareholders contained in this Agreement shall be, with respect to those
representations and warranties qualified by any materiality standard, true and
correct in all respects, as of the Closing Date, and with respect to all other
representations and warranties, true and correct in all material respects, as of
the Closing Date, with the same force and effect as if made as of the Closing
Date.
 
7.2  Compliance with Agreements and Covenants.  Bohica and the Shareholders
shall have performed and complied in all material respects with all of their
covenants, obligations and agreements contained in this Agreement to be
performed and complied with by them on or prior to the Closing Date.
 
7.3  Officer’s and Shareholder’s Certificate.  Shoshone and Merger Sub shall
have been furnished with a certificate (dated as of the Closing Date and in form
and substance reasonably satisfactory to Shoshone and Merger Sub), executed by
an executive officer of Bohica and by the Shareholders, certifying to the
fulfillment of the conditions specified in subsections 7.1 and 7.2 hereof.
 
7.4  Consents and Approvals.  Bohica and the Shareholders shall have received
written evidence satisfactory to Shoshone and Merger Sub that all consents and
approvals required for the consummation of the transactions contemplated hereby
have been obtained, and all required filings have been made.
 
7.5  No Material Adverse Change.  At the Closing Date, there shall have been no
material adverse change in the assets, liabilities, prospects, financial
condition or business of Bohica or the Shareholders.  Between the date of this
Agreement and the Closing Date, there shall not have occurred an event that
would reasonably be expected to constitute a Bohica Material Adverse Effect.
 
7.6  Actions or Proceedings.  No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which: (a) is
likely to constitute a Bohica Material Adverse Effect; or (b) could enjoin,
restrain or prohibit, or could result in substantial damages in respect of, any
provision of this Agreement or the consummation of the transactions contemplated
hereby.
 
7.7  Approval of Exchange.  The Shareholders shall have approved this Agreement
and the Merger contemplated hereby in accordance with the Colorado Act.
 
7.8  No Registration.  Shoshone shall be satisfied that the issuance of the
Shoshone Common Stock in connection with Merger shall be exempt from
registration under Regulation D of the Securities Act and Section 4(a)(2) of the
Securities Act and all applicable state securities laws.
 

 
15

--------------------------------------------------------------------------------

 

ARTICLE VIII.
CONDITIONS PRECEDENT TO OBLIGATIONS OF Bohica
 
The obligations of Bohica and the Shareholders under this Agreement are subject
to the satisfaction (or waiver by Bohica and the Shareholders) of the following
conditions precedent on or before the Closing Date:
 
8.1  Representations and Warranties.  Without supplementation after the date of
this Agreement, the representations and warranties of Shoshone contained in this
Agreement shall be, with respect to those representations and warranties
qualified by any materiality standard, true and correct in all respects, as of
the Closing Date, and with respect to all other representations and warranties,
true and correct in all material respects, as of the Closing Date, with the same
force and effect as if made as of the Closing Date.
 
8.2  Compliance with Agreements and Covenants.  Shoshone and Merger Sub shall
have performed and complied in all material respects with all of their
covenants, obligations and agreements contained in this Agreement to be
performed and complied with by it on or prior to the Closing Date.
 
8.3  Officer’s and Shareholder’s Certificate.  Bohica and the Shareholders shall
have been furnished with a certificate (dated as of the Closing Date and in form
and substance reasonably satisfactory to Bohica and the Shareholders), executed
by an executive officer of Shoshone and Merger Sub, certifying to the
fulfillment of the conditions specified in subsections 8.1 and 8.2 hereof.
 
8.4  No Material Adverse Change.  At the Closing Date, there shall have been no
material adverse change in the assets, liabilities, financial condition or
business of Shoshone.  Between the date of this Agreement and the Closing Date,
there shall not have occurred an event that would reasonably be expected to
constitute a Shoshone Material Adverse Effect.
 
8.5  Actions or Proceedings.  No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which: (a) is
likely to constitute a Shoshone Material Adverse Effect; or (b) could enjoin,
restrain or prohibit, or could result in substantial damages in respect of, any
provision of this Agreement or the consummation of the transactions contemplated
hereby.
 
8.6  Approval of Exchange.  Shoshone shall have approved this Agreement and the
Merger contemplated hereby in accordance with the Colorado Act.
 
ARTICLE IX.
DELIVERIES AT CLOSING
 
9.1  Bohica and Shareholders Closing Deliveries.  At the Closing, in addition to
any other documents or agreements required under this Agreement, Bohica and the
Shareholders shall deliver to Shoshone the following:
 
(a)  Resolutions of the Board of Directors of Bohica approving and authorizing
the execution, delivery and performance of this Agreement, the consummation of
the transactions contemplated hereby and thereby, including the Merger;
 
(b)  The certificate required pursuant to subsection 7.3 hereof
 
(c)  The executed Certificate of Merger;
 

 
16

--------------------------------------------------------------------------------

 

(d)  Duly cancelled certificates representing all of the outstanding shares of
the Bohica Common Stock and a certificate of Bohica in the name of Shoshone
representing the shares Merger Sub exchanged pursuant to Section 2.1(b);
 
(e)  An executed representation form from each Shareholder in form as set forth
in Exhibit A; and
 
(f)  All other instruments and documents that Shoshone or its counsel, in the
reasonable exercise of their reasonable discretion, shall deem to be necessary:
(i) to fulfill any obligation required to be fulfilled by Bohica or the
Shareholders on the Closing Date; and (ii) to evidence satisfaction of any
conditions to Closing.
 
9.2  Shoshone and Merger Sub Closing Deliveries.  At the Closing, in addition to
any other documents or agreements required under this Agreement, Shoshone and
Merger Sub shall deliver to Bohica and the Shareholders the following:
 
(a)  Resolutions of the Board of Directors of Shoshone and Merger Sub approving
and authorizing the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby and thereby, including
the Merger;
 
(b)  The certificate required pursuant to subsection 8.3 hereof;
 
(c)  The executed Certificate of Merger;
 
(d)  Irrevocable instructions to the transfer agent of Shoshone to issue and
deliver to the Shareholders at Closing stock certificates representing the
Shoshone Shares; and
 
(e)  All other instruments and documents that Bohica or its counsel, in the
reasonable exercise of their reasonable discretion, shall deem to be necessary:
(i) to fulfill any obligation required to be fulfilled by Shoshone or Merger Sub
on the Closing Date; and (ii) to evidence satisfaction of any conditions to
Closing.
 
ARTICLE X.
MUTUAL INDEMNIFICATION

10.1     Indemnification.
 
(a)  Bohica and the Shareholders, jointly and severally, covenant and agree to
defend, indemnify and hold harmless Shoshone, its officers, directors, and each
person who controls Shoshone within the meaning of the Securities Act from and
against any damages (including reasonable attorneys’, accountants’, and experts’
fees, disbursements of counsel, and other related costs and expenses) arising
out of or resulting from: (A) any inaccuracy in or breach of any representation
or warranty made by Bohica or the Shareholders in this Agreement; or (B) the
failure of Bohica or the Shareholders to perform or observe fully any covenant,
agreement or provision to be performed or observed by such party pursuant to
this Agreement.
 
(b)  Shoshone covenants and agrees to defend, indemnify and hold harmless Bohica
and the Shareholders, Bohica’s officers, directors, and each person who controls
Bohica within the meaning of the Securities Act from and against any damages
(including reasonable attorneys’, accountants’, and experts’ fees, disbursements
of counsel, and other related costs and expenses) arising out of or resulting
from: (A) any inaccuracy in or breach of any representation or warranty made by
 

 
17

--------------------------------------------------------------------------------

 

Shoshone in this Agreement; or (B) the failure by Shoshone to perform or observe
any covenant, agreement or condition to be performed or observed by it pursuant
to this Agreement.
 
10.2     Third Party Claims.
 
(a)  If any party entitled to be indemnified pursuant to Section 10.1 (an
“Indemnified Party”) receives notice of the assertion by any third party of any
claim or of the commencement by any such third person of any actual or
threatened claim, action, suit, arbitration, hearing, inquiry, proceeding,
complaint, charge or investigation by or before any governmental entity or
arbitrator and an appeal from any of the foregoing (any such claim or Action
being referred to herein as an “Indemnifiable Claim”) with respect to which
another party hereto (an “Indemnifying Party”) is or may be obligated to provide
indemnification, the Indemnified Party shall promptly notify the Indemnifying
Party in writing (the “Claim Notice”) of the Indemnifiable Claim; provided, that
the failure to provide such notice shall not relieve or otherwise affect the
obligation of the Indemnifying Party to provide indemnification hereunder,
except to the extent that any damages directly resulted or were caused by such
failure.
 
(b)  The Indemnifying Party shall have thirty (30) days after receipt of the
Claim Notice to undertake, conduct and control, through counsel of its own
choosing, and at its expense, the settlement or defense thereof, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith; provided, that (A) the Indemnifying Party shall permit the
Indemnified Party to participate in such settlement or defense through counsel
chosen by the Indemnified Party (subject to the consent of the Indemnifying
Party, which consent shall not be unreasonably withheld), provided that the fees
and expenses of such counsel shall not be borne by the Indemnifying Party, and
(Bi) the Indemnifying Party shall not settle any Indemnifiable Claim without the
Indemnified Party’s consent.  So long as the Indemnifying Party is vigorously
contesting any such Indemnifiable Claim in good faith, the Indemnified Party
shall not pay or settle such claim without the Indemnifying Party’s consent,
which consent shall not be unreasonably withheld.
 
(c)  If the Indemnifying Party does not notify the Indemnified Party within
thirty (30) days after receipt of the Claim Notice that it elects to undertake
the defense of the Indemnifiable Claim described therein, the Indemnified Party
shall have the right to contest, settle, or compromise the Indemnifiable Claim
in the exercise of its reasonable discretion; provided, that the Indemnified
Party shall notify the Indemnifying Party of any compromise or settlement of any
such Indemnifiable Claim.
 
10.3     Indemnification Non-Exclusive.  The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common-law remedy any party may have for breach of representation,
warranty, covenant or agreement.
 
ARTICLE XI.
TERMINATION
 
11.1     Agreement Termination.  Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
hereby may be abandoned at any time prior to the Closing Date, only as follows:
 
(a)  by mutual written agreement of Shoshone and Bohica;
 
(b)  by Shoshone (if neither Shoshone nor Merger Sub is then in material breach
of its obligations under this Agreement) if: (i) a material default or breach
shall be made by Bohica or the Shareholders with respect to the due and timely
performance of any of its or his covenants and
 

 
18

--------------------------------------------------------------------------------

 

agreements contained herein and such default is not cured within thirty (30)
days; (ii) Bohica or the Shareholders makes an amendment or supplement to any
schedule hereto and such amendment or supplement reflects a Bohica Material
Adverse Effect after the date of this Agreement; (iii) a Bohica Material Adverse
Effect shall have occurred after the date of this Agreement; (iv) the Board of
Directors of Bohica withdraws its recommendation of the Merger, if given, or
recommends to holders of Bohica Common Stock the approval of any transaction
other than the Merger; or (v) the Shareholders fail to approve this Agreement as
provided in this Agreement;
 
(c)  by Bohica or the Shareholders (if neither Bohica nor the Shareholders is
then in material breach of their obligations under this Agreement) if: (i) a
material default or breach shall be made by Shoshone or Merger Sub with respect
to the due and timely performance of any of its covenants and agreements
contained herein and such default is not cured within thirty (30) days; (ii)
Shoshone makes an amendment or supplement to any schedule hereto and such
amendment or supplement reflects a Shoshone Material Adverse Effect after the
date of this Agreement; (iii) a Shoshone Material Adverse Effect shall have
occurred after the date of this Agreement; or (iv) the Board of Directors of
Shoshone withdraws its recommendation of the Merger, if given, or recommends to
Shoshone the approval of any transaction other than the Merger.
 
11.2     Effect of Termination.  In the event of termination of this Agreement
authorized pursuant to Section 11.1 hereof, written notice thereof shall be
given to the other parties and all obligations of the parties shall terminate
and, except as otherwise provided in this Section, no party shall have any right
against any other party hereto for any loss, damage, expense (including
out-of-pocket expenses) or liability, including, without limitation, reasonable
attorneys’ fees and disbursements arising out of the preparation and execution
of this Agreement, fulfilling in whole in part its obligations under this
Agreement or otherwise incurred by a party in any action or proceeding between
such party and the other party hereto or between such party and a third party,
which is determined to have been sustained, suffered or incurred by a party and
to have arisen from or in connection with an event or state of facts which is
subject to claim under this Agreement.
 
ARTICLE XII.
MISCELLANEOUS
 
12.1     Certain Definitions.  As used herein, the following terms shall have
the meanings set forth below:
 
“Affiliate” shall mean any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the
Securities Act.

“Applicable Law” shall mean all Laws, to the extent applicable to any Person.
 
 “Contract” shall mean any contract, lease, commitment or understanding, sales
order, purchase order, agreement, indenture, mortgage, note, bond, instrument or
license, whether written or verbal, which is intended or purports to be a
binding and enforceable agreement.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
 
“Governmental Authority” shall mean: (a) the government of the United States:
(b) the government of any foreign country; (c) the government of any state or
political subdivision of the government of the United States or the government
of any foreign country; or (d) any entity, body or
 

 
19

--------------------------------------------------------------------------------

 

authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
 
“Knowledge” shall mean, as it relates to as it relates to Shoshone, the actual
knowledge of Howard M. Crosby, in each case upon reasonable inquiry; and as it
relates to Bohica, the actual knowledge of John R. Reynolds, in each case upon
reasonable inquiry.
 
“Law” shall mean any law, statute, regulation, ordinance, rule, order, decree,
judgment, consent decree, settlement agreement or governmental requirement
enacted, promulgated, entered into, agreed or imposed by any Governmental
Authority.
 
“Lien” shall mean any mortgage, lien, charge, restriction, pledge, security
interest, option, lease or sublease, claim, right of any third party, easement,
encroachment or encumbrance upon any of the assets or properties of any Person.
 
“Permit” shall mean a permit, license, registration, certificate of occupancy,
approval or other authorization issued by any Governmental Authority.
 
 “Person” shall mean any corporation, proprietorship, firm, partnership, limited
partnership, trust, association, individual or other entity.
 
“Shoshone Material Adverse Effect” shall mean any change or effect that is, or
is reasonably likely to be, materially adverse to the business, assets and
liabilities (taken together), financial condition or operations or results of
operations of Shoshone or Merger Sub, taken as a whole; provided, however, that
none of the following shall be deemed (either alone or in combination) to
constitute such a change or effect: (a)(i) any adverse change attributable to
the announcement or pendency of the transactions contemplated by this Agreement;
or (ii) any adverse change attributable to or conditions generally affecting the
United States economy or financial markets in general; (b) any act or threat of
terrorism or war anywhere in the world, any armed hostilities or terrorist
activities anywhere in the world, any threat or escalation of armed hostilities
or terrorist activities anywhere in the world or any governmental or other
response or reaction to any of the foregoing; or (c) any action by Shoshone or
Merger Sub approved or consented to in writing by Bohica.
 
“SEC” shall mean the U.S. Securities and Exchange Commission.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
 
 “Shareholder Approval” shall mean the approval of the Merger, this Agreement,
and the transactions contemplated hereby by the Shareholders in accordance with
the Articles of Incorporation and Bylaws of Bohica and the Colorado Act and by
Shoshone in accordance with the Articles of Incorporation and Bylaws of Merger
Sub and the Idaho Act.
 
“Bohica Material Adverse Effect” shall mean any change or effect that is, or is
reasonably likely to be, materially adverse to the business, assets and
liabilities (taken together), financial condition or operations or results of
operations of Bohica and its subsidiaries, taken as a whole; provided, however,
that none of the following shall be deemed (either alone or in combination) to
constitute such a change or effect: (a) (i) any adverse change attributable to
the announcement or pendency of the transactions contemplated by this Agreement;
or (ii) any adverse change attributable to or conditions generally affecting (A)
the mortgage banking or brokerage industries as a whole; (B) the United States
economy or financial markets in general; or (C) any foreign economy or financial
markets in any location where
 

 
20

--------------------------------------------------------------------------------

 

Bohica has material operations or sales; (b) any act or threat of terrorism or
war anywhere in the world, any armed hostilities or terrorist activities
anywhere in the world, any threat or escalation of armed hostilities or
terrorist activities anywhere in the world or any governmental or other response
or reaction to any of the foregoing; or (c) any action by Bohica approved or
consented to in writing by SHOSHONE.
 
12.2     Other Definitions.  In addition to the terms set forth in Section 12.1
and elsewhere in this Agreement, each of the following terms is defined in the
section set forth opposite such term:
 
Defined Term
Location
   
Agreement
Preamble
Bohica
Preamble
Bohica Common Stock
§2.1
Certificate of Merger
§1.2
Claim Notice
§10.2(a)
Closing
§3.1
Closing Date
§3.1
Code
Recitals
Colorado Act
Recitals
Effective Date
§1.2
Effective Time
§1.2
Environmental Laws
§5.9
Indemnifiable Claim
§10.2(a)
Indemnified Party
§10.2(a)
Indemnifying Party
§10.2(a)
Merger
Recitals
Merger Sub
Preamble
Shoshone
Preamble
Shoshone Common Stock
§2.1
Shoshone Financial Statements
§5.5
Shoshone Intellectual Prperty Rights
§5.13
Shoshone Material Permits
§5.11
Shoshone Shares
§2.1
Shoshone
Preamble
SEC Reports
§5.5
Shareholders
Preamble
Surviving Corporation
§1.1

12.3     Expenses.  Except as otherwise expressly provided herein, each party
hereto shall bear its own expenses with respect to this Agreement and the
transactions contemplated hereby.
 
12.4     Amendment.  This Agreement may only be amended, modified or
supplemented pursuant to a written agreement signed by each of the parties
hereto.
 
12.5     Survival of Representations and Warranties.  All covenants,
representations and warranties made herein shall survive the making of this
Agreement and shall continue in full force and effect for a period of one year
from the Effective Time, at the end of which period no claim may be made with
respect to any such covenant, representation, or warranty unless such claim
shall have been asserted in writing to the indemnifying party during such
period.
 
12.6     Press Release; Public Announcements.  The parties shall not make any
other public announcements in respect of this Agreement or the transactions
contemplated herein without prior
 

 
21

--------------------------------------------------------------------------------

 

consultation and written approval by the other party as to the form and content
thereof, which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, any party may make any disclosure which its counsel advises is
required by applicable law or regulation, in which case the other party shall be
given such reasonable advance notice as is practicable in the circumstances and
the parties shall use their best efforts to cause a mutually agreeable release
or announcement to be issued.
 
12.7     Notices.  All notices, consents, waivers, requests, instructions, or
other communications required or permitted hereunder shall be in writing, and
shall be deemed to have been duly given if (a) delivered personally (effective
upon delivery), (b) sent by a reputable, established international courier
service (effective one business day after being delivered to such courier
service), or (c) mailed by certified mail, return receipt requested, postage
prepaid (effective three business days after being deposited in the U.S. mail),
addressed as follows (or to such other address as the recipient may have
furnished for such purpose pursuant to this Section):
 
If to Bohica and the Shareholders:

35853 Highway 550
Durango, CO  81301
Attn:  John R. Reynolds

with a copy (which shall not constitute notice) to:

Ronald N. Vance
Attorney at Law
1656 Reunion Avenue
Suite 250
South Jordan, UT  84095

and:
 
If to Shoshone and Merger Sub:
 
5968 N. Government Way #305
Coeur d’Alene, ID 83815
Attn:  Howard M. Crosby, President

with a copy (which shall not constitute notice) to:

or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.

12.8     Waivers.  The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
party at a later time to enforce the same.  No waiver by a party of any
condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any
other condition or breach of any other term, covenant, representation or
warranty.
 
12.9     Interpretation.  The headings preceding the text of Articles and
Sections included in this Agreement are for convenience only and shall not be
deemed part of this Agreement or be given any effect in interpreting this
Agreement.  The use of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement.  The use of the terms “including” or
“include” shall in all cases herein mean “including, without limitation” or
“include, without limitation,” respectively.
 

 
22

--------------------------------------------------------------------------------

 

12.10   Applicable Law and Venue.  This Agreement and the rights and duties of
the parties hereto shall be construed and determined in accordance with the laws
of the State of Idaho (without giving effect to any choice or conflict of law
provisions), and any and all actions to enforce the provisions of this Agreement
shall be brought in a court of competent jurisdiction in the State of Idaho and
in no other place.
 
12.11   Attorneys’ Fees.  If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
will be entitled to recover reasonable attorneys’ fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
 
12.12   Assignment.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment of any rights or obligations shall be made
by any party without the prior written consent of all the other parties hereto.
 
12.13   No Third Party Beneficiaries.  This Agreement is solely for the benefit
of the parties hereto and, to the extent provided herein, their respective
directors, officers, employees, agents and representatives, and no provision of
this Agreement shall be deemed to confer upon other third parties any remedy,
claim, liability, reimbursement, cause of action or other right.
 
12.14   Further Assurances.  Upon the reasonable request of the parties hereto,
the other parties hereto shall, on and after the Closing Date, execute and
deliver such other documents, releases, assignments and other instruments as may
be required to effectuate completely the transactions contemplated by this
Agreement.
 
12.15   Severability.  If any provision of this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality or enforceability of the other
provisions hereof shall remain in full force and shall not be affected thereby,
and there shall be deemed substituted for such invalid, illegal or unenforceable
provision a valid, legal and enforceable provision as similar as possible to the
provision at issue.
 
12.16   Remedies Cumulative.  The remedies provided in this Agreement shall be
cumulative and shall not preclude the assertion or exercise of any other rights
or remedies available by law, in equity or otherwise.
 
12.17   Entire Understanding.  This Agreement sets forth the entire agreement
and understanding of the parties hereto and supersedes all prior agreements,
letters of intent, arrangements and understandings between the parties.
 
12.18   Exhibits and Schedules. Each of the exhibits, schedules, or similar
attachments referenced in this Agreement is annexed hereto and is incorporated
herein by this reference and expressly made a part hereof.
 
12.19   Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Facsimile transmissions of any signed original
document, or transmission of any signed facsimile document, shall constitute
delivery of an executed original.  At the request of any of the parties, the
parties shall confirm facsimile transmission signatures by signing and
delivering an original document.
 

SIGNATURE PAGE FOLLOWS

 
23

--------------------------------------------------------------------------------

 

SIGNATURE PAGE

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement and
Plan of Merger to be executed and delivered on the respective day and year set
forth below.

   
Shoshone Silver/Gold Mining Company
                 
Date:  October 31, 2012
 
By
/s/ Howard M. Crosby
     
Howard M. Crosby, President
               
Shoshone Acquisition Corp.
                 
Date:  October 31, 2012
 
By
/s/ Howard M. Crosby
     
Howard M. Crosby, President
               
Bohica Mining Corp.
                 
Date:  October 22, 2012
 
By /s/ John R. Reynolds
   
      John R. Reynolds, President
                 
Date:  October 22, 2012
 
/s/ John R. Reynolds
   
John R. Reynolds, Shareholder
                 
Date:  October 22, 2012
 
/s/ Frances A. Reynolds
   
Frances A. Reynolds, Shareholder

 
24

--------------------------------------------------------------------------------

 

EXHIBIT A

Shoshone Silver/Gold Mining Company

Representation Form

This Representation Form is furnished in connection with the issuance of shares
of common stock (the “Shares”) of Shoshone Silver/Gold Mining Company, an Idaho
corporation (the “Company”) in a non-public offering of the Shares (the
“Offering”) being made to the undersigned pursuant to the terms and conditions
of the Agreement and Plan of Merger dated October 17, 2012, by and among the
Company and the undersigned (the “Merger Agreement”).  This transaction is
intended to comply with Section 4(a)(2), and/or Section 4(a)(6) of the
Securities Act of 1933, as amended (the “Securities Act”), Rule 506 of
Regulation D promulgated by the Securities and Exchange Commission (the “SEC”)
under the Securities Act, and corresponding state exemptions.

ALL INFORMATION CONTAINED IN THIS REPRESENTATION FORM WILL BE TREATED
CONFIDENTIALLY BY THE COMPANY.  However, the undersigned understands that the
Company may present this Representation Form to such parties as it deems
appropriate if called upon to establish that the proposed issuance of the Shares
to the undersigned is exempt from registration under the Securities Act or
similar state laws.  Further, the undersigned understands that the Offering
itself may be reported to the SEC or state securities regulators pursuant to the
requirements of Regulation D or corresponding state regulations.

1.    Accredited Investor Status.  The undersigned hereby represents that he is
an “accredited investor” as that term is defined in Rule 501(a) of Regulation D
promulgated by the SEC.  The undersigned has initialed below each of the
categories which apply to the undersigned.

 
_____
a natural person whose individual net worth (i.e., excess of total assets over
total liabilities, but excluding the principal residence) at the time of the
closing of the Merger Agreement exceeds $1,000,000;

 
_____
a natural person who had an individual income in excess of $200,000 in each of
the two most recent calendar years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year.  Individual income is
defined for this purpose as adjusted gross income as determined for federal
income tax purposes under the Internal Revenue Code (the “Code”), plus (i) any
deductions for long-term capital gains under Section 1202 of the Code, (ii) any
depletion deductions under Section 611, et seq., of the Code, (iii) any interest
income excluded under Section 103 of the Code, and (iv) any partnership losses
allocated to the undersigned as reported on Schedule E of Form 1040;

 
_____
an entity all of the equity owners of which are accredited investors.

2.    Representations of the Undersigned.  The undersigned represents and
warrants to the Company as set forth below.

a.    Restricted Securities.  The undersigned understands that the Shares have
not been registered pursuant to the Securities Act, or any state securities act,
and thus are “restricted securities” as defined in Rule 144 promulgated by the
SEC.  Therefore, under current interpretations and applicable rules, he or she
will probably have to retain the Shares for a period of at least six months from
the date of

 
25

--------------------------------------------------------------------------------

 

closing of the Merger Agreement and at the expiration of such period his or her
sales may be confined to brokerage transactions of limited amounts requiring
certain notification filings with the SEC and such disposition may be available
only if the Company is current in its filings with the SEC under the Exchange
Act, or other public disclosure requirements.  Accordingly, the undersigned
hereby acknowledges that he or she is prepared to hold the Shares for an
indefinite period.

b.        Investment Purpose.  The undersigned acknowledges that the Shares are
being purchased for his or her own account, for investment, and not with the
present view towards the distribution, assignment, or resale to others or
fractionalization in whole or in part.  The undersigned further acknowledges
that no other person has or will have a direct or indirect beneficial or
pecuniary interest in the Shares.

c.        Limitations on Resale; Restrictive Legend.  The undersigned
acknowledges that he or she will not sell, assign, hypothecate, or otherwise
transfer any rights to, or any interest in, the Shares except (i) pursuant to an
effective registration statement under the Securities Act, or (ii) in any other
transaction which, in the opinion of counsel acceptable to the Company, is
exempt from registration under the Securities Act, or the rules and regulations
of the SEC thereunder.  The undersigned also acknowledges that an appropriate
legend will be placed upon each of the certificates representing the Shares
stating that the Shares have not been registered under the Securities Act and
setting forth or referring to the restrictions on transferability and sale of
the Shares.

d.        Information.  The undersigned has been furnished (i) with all
requested materials relating to the business, finances, and operations of the
Company; (ii) with information deemed material to making an informed investment
decision; and (iii) with additional requested information necessary to verify
the accuracy of any documents furnished to the undersigned by the Company.  Such
person has been afforded the opportunity to ask questions of the Company and its
management and to receive answers concerning the terms and conditions of the
Offering.

e.        Documents.  The undersigned has received or had access to following
documents: (i) the Company’s annual report on Form 10-K for the most recent year
end (the “Annual Report”); (ii) the Company’s quarterly reports on Form 10-Q for
each of the quarters following the date of the Annual Report; and (iii) the
Company’s current reports on form 8-K and any other documents filed with the SEC
since the filing of the Annual Report.  Such person has relied upon the
information contained therein and has not been furnished any other documents,
literature, memorandum, or prospectus.

f.        Knowledge and Experience in Business and Financial Matters.  The
undersigned has such knowledge and experience in business and financial matters
that he or she is capable of evaluating the risks of the prospective investment,
and the financial capacity of such party is of such proportion that the total
cost of such person’s commitment in the Shares would not be material when
compared with his or her total financial capacity.

IN WITNESS WHEREOF, the undersigned has executed this Representation Form this
____ day of October 2012.

           

 
26

--------------------------------------------------------------------------------