Unassociated Document


    AGREEMENT
AND PLAN OF MERGER

     

    AGREEMENT
AND PLAN OF MERGER (this “Agreement”) dated as of
December 30, 2009, by and among Blue Fin Capital, Inc., a Utah corporation (the
“Target”), Desert Hawk
Gold Corp., a Nevada corporation (“Desert Hawk”), and Desert Hawk
Acquisition Corp., a Utah corporation and wholly-owned subsidiary of Desert Hawk
(the “Merger Sub”). Certain capitalized
terms used in this Agreement are defined in ARTICLE XI of this
Agreement.

     

    WITNESSETH:

     

    WHEREAS,
Desert Hawk desires to acquire Target, and Target desires to be acquired by
Desert Hawk through the merger of Merger Sub with and into Target, with Target
being the surviving entity pursuant to the terms hereinafter set forth (the
“Merger”);

     

    WHEREAS,
the respective Boards of Directors of Desert Hawk, Merger Sub, and Target have
approved and declared advisable the Merger upon the terms and subject to the
conditions of this Agreement, and in accordance with Nevada Corporation Law in
the case of Desert Hawk and the Utah Revised Business Corporation Act (the
“Utah Act”) in the case
of Merger Sub and Target;

     

    WHEREAS,
the respective Boards of Directors of Desert Hawk, Merger Sub, and Target 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, and Desert Hawk, as the sole shareholder of Merger Sub, has
approved this Agreement and the Merger, and the holders of Target Common Stock
(as defined below) will approve this Agreement and the Merger prior to the
Closing; and

     

    WHEREAS,
Desert Hawk, Merger Sub, and Target 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 Utah Act, Merger Sub shall be merged with and into Target, and Target 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, Articles of Merger (the “Articles of Merger”) shall be
executed and delivered to the Utah Division of Corporations and Commercial Code
in accordance with Section 16-10a-1105 of the Utah Act (the time of such filing
being the “Effective
Time”, and
the date of such filing being the “Effective Date”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    1.3     Surviving
Corporation.  Following the Merger, Target shall continue to
exist under and be governed by the laws of the State of Utah 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 Utah Act.  Without
limiting the generality of the foregoing, at the Effective Time, all the
property, rights, privileges, powers, and franchises of the Target and the
Merger Sub shall vest in the Surviving Corporation.

     

    1.5     Articles of Incorporation of
Surviving Corporation.  The Articles of Incorporation of
Target, 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 Target, 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 Target immediately
prior to the Effective Time shall be the initial 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 Target 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 Target Common
Stock.  At the Effective Time each share of Common Stock, par
value $0.001 per share, of Target (the “Target Common Stock”), issued
and outstanding immediately prior to the Effective Time shall be converted into
the right to receive one (1) share of Common Stock, par value $0.01 per share,
of Desert Hawk (the “Desert
Hawk Common Stock”) (such conversion rate is hereinafter referred to as
the “Common Conversion
Rate”).  All converted shares of Target 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 Desert Hawk Common
Stock into which such shares of Target Common Stock were converted in the Merger
pursuant to this Agreement.

     

    (b)           Merger
Sub.  Each share of common stock, par value $0.001 per share,
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and be exchanged for one (1) newly and validly issued,
fully paid and nonassessable share of common stock, par value $0.001 per share,
of the Surviving Corporation.

     

    
      
        
        

      

      
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    2.2     Dissenter
Shareholders.  Any holder of shares of Target Common Stock
issued and outstanding immediately prior to the Effective Time, with respect to
which dissenters’ rights, if any, are available by reason of the Merger pursuant
to Section 16-10a-1302 of the Utah Act, who has not voted in favor of the Merger
or consented thereto in writing and who complies with the requirements of
Section 16-10a-1300 et seq. of the Utah Act (the “Target Dissenting
Shares”) shall not be entitled to
receive any Desert Hawk Common Stock pursuant to this ARTICLE II, unless such
holder (the “Target Dissenting
Shareholder(s)”) fails to perfect, effectively withdraws or loses its
dissenters’ rights under the Utah Act.  Each Target Dissenting
Shareholder shall be entitled to receive only such rights as are granted under
Section 16-10a-1300 et seq. of the Utah Act.  If any Target Dissenting
Shareholder fails to perfect, effectively withdraws or loses such dissenters’
rights under the Utah Act, such holder shall no longer be deemed a Target
Dissenting Shareholder and such holder’s Target Dissenting Shares shall
thereupon be deemed to have been converted as of the Effective Time into the
right to receive that class and number of shares of Desert Hawk Common Stock to
which such shares of Target Common Stock are entitled pursuant to this ARTICLE
II, in each case without interest.  Prior to the Effective Time,
Target shall give Desert Hawk prompt notice of any written demands for appraisal
pursuant to Section 16-10a-1321 of the Utah Act received by Target, withdrawals
of any such written demands and any other documents or instruments received by
Target in connection therewith.  Prior to the Effective Time, Target
shall not, except with the prior written consent of Desert Hawk, which consent
shall not unreasonably be withheld or delayed, make any payment with respect to,
or settle or offer to settle, any such demands, or agree to do any of the
foregoing.  Any payments made with respect to Target Dissenting Shares
shall be made solely by the Surviving Corporation, and no funds or other
property shall be provided by Target, Desert Hawk or Merger Sub for such
payment.

     

    2.3     Conversion of Shares of
Target Common Stock.  The manner of converting shares of Target
Common Stock into shares of Desert Hawk Common Stock in accordance with ARTICLE
II above shall be as follows:

     

    (a)           From
and after the Effective Time, Desert Hawk (either directly or through its
transfer agent) shall act as exchange agent in effecting the conversion of
shares of Target Common Stock pursuant to Section 2.1(a)
hereof.  Desert Hawk will issue certificates representing the shares
of Desert Hawk Common Stock issued to each holder of shares of Target Common
Stock other than a Target Dissenting Shareholder (each, a “Participating Shareholder”) in
connection with the Merger. Desert Hawk (either directly or through its transfer
agent) shall cause certificates representing shares of Desert Hawk Common Stock
to be distributed to each Participating Shareholder, all in accordance with the
provisions of this ARTICLE II.  The shares which prior to the
Effective Time represented outstanding shares of Target Common Stock shall
forthwith be canceled.

     

    (b)           Participating
Shareholders shall, for all purposes, be deemed to be shareholders of Desert
Hawk, as of the Effective Time, irrespective of whether they have received their
certificates representing shares of Desert Hawk Common Stock.

     

    2.4     Restricted
Stock.  The Desert Hawk Common Stock 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 Desert
Hawk Common Stock to be issued pursuant to the Merger shall bear an appropriate
restrictive legend in accordance with Rule 144 under the Securities
Act.

     

    
      
        
        

      

      
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    ARTICLE
III.

    CLOSING

     

    3.1     Closing
Date.  Immediately following the Effective Time, 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 Ronald N. Vance, Attorney at Law, 1656 Reunion Avenue, Suite 250,
South Jordan, Utah, at 9:00 a.m., mountain standard time, on December 31, 2009,
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”).

     

    3.2     Execution of Merger
Documents.  On the Closing Date, the parties hereto shall cause
the Merger to be consummated by filing the Articles of Merger, together with any
required, related certificates, with the Utah Division of Corporations and
Commercial Code, in such form as required by, and executed in accordance with
the relevant provisions of, the Utah Act.  The Merger shall be
effective as of the Effective Time.

     

    ARTICLE
IV.

    REPRESENTATIONS
AND WARRANTIES OF TARGET

     

    Target
represents and warrants to Desert Hawk 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.  Target is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah, 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 Target have been delivered to Desert
Hawk.  Target does not have any wholly or partially owned subsidiaries
and does not own any economic, voting or management interests in any other
Person.

     

    4.2     Due
Authorization.  Subject to the Shareholder Approval, Target has
full power and authority to enter into this Agreement, the Articles of Merger
and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and performance by Target of this
Agreement have been duly and validly approved and authorized by the Board of
Directors of Target, and, other than the Shareholder Approval, no other actions
or proceedings on the part of Target are necessary to authorize this Agreement,
the Articles of Merger and the transactions contemplated hereby and
thereby.  Target has duly and validly executed and delivered this
Agreement.  This Agreement constitutes the legal, valid and binding
obligation of Target, 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).

     

    
      
        
        

      

      
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    4.3     Consents;
Non-Contravention.

     

    (a)           Except
for the filing of the Articles of Merger with the appropriate authorities
pursuant to the Utah Act, 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 Target
of this Agreement or the Articles of Merger, or the consummation of the
transactions contemplated hereby or thereby, or for the lawful continued
operation by Desert Hawk following the Effective Time of the respective
businesses currently conducted by the Target Parties.

     

    (b)           Except
as would not result in a Target Material Adverse Effect, the execution, delivery
and performance by Target of this Agreement and the Articles 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 Target Material Contract; (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 any Target Party under any Contract to
which any Target Party is a party or by which any Target Party or any of their
respective assets or properties are bound; (iv) permit the acceleration of the
maturity of any indebtedness of any Target Party or indebtedness secured by any
Target Party’s assets or properties; (v) violate or conflict with any provision
of the Articles of Incorporation or Bylaws of Target; 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 any Target Party except
as provided for in this Agreement.

     

    4.4     Capitalization.  The
authorized capital stock of Target consists of 50,000,000 shares of Target
Common Stock and 5,000,000 shares of Target Preferred Stock.  On the
date hereof, there are issued and outstanding 2,713,636 shares of Target Common
Stock and no shares of preferred stock.  All of the issued and
outstanding shares of Target 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 Target’s capital
stock are subject to preemptive rights or any other similar rights or any liens
or encumbrances suffered or permitted by Target; (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 Target, or contracts, commitments, understandings or
arrangements by which Target is or may become bound to issue additional shares
of capital stock of Target 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 Target; (iv) there are
no agreements or arrangements under which Target is obligated to register the
sale of any of its securities under the Securities Act; (v) there are no
outstanding securities of Target which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which Target is or may become bound to redeem a security of
Target; (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) Target 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 Target’s capital stock.

     

    
      
        
        

      

      
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    4.5     No Material
Liabilities.  The Target has no material debts, liabilities or
obligations of any nature.

     

    4.6     Contracts.  The
Target has no material Contracts.

     

    4.7     Reorganization
Treatment.

     

    (a)           Assets.  At
the Effective Time, Target 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 paid by the Surviving Corporation to
holders of Target Dissenting Shares and, pursuant to Section 2.1(g), holders of
Target Common Stock and amounts used by Target or the Surviving Corporation to
pay Merger expenses, in each case, will be treated as constituting assets of
Target immediately prior to the Effective Time.

     

    (b)           Business.  Target
currently conducts a business.  Such business is Target’s “historic
business” within the meaning of Treasury Regulations Section 1.368-1(d), and no
assets of Target have been sold, transferred, or otherwise disposed of that
would prevent Desert Hawk from continuing the “historic business” of Target or
from using a “significant portion” of Target’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.  Target is not an “investment company” as defined in
Sections 368(a)(2)(F)(iii) and (iv) of the Code.

     

    (d)           Redemptions and
Distributions.  Neither Target nor any person related to Target
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 Target’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 Target
Common Stock.

     

    (f)           Control.  In
the Merger, stock of Target representing “control” of Target (within the meaning
of Section 368(c) of the Code) will be exchanged solely for “voting stock” of
Desert Hawk (within the meaning of Sections 368(a)(1)(B) and (2)(E) of the
Code).

     

    4.8     Environmental.  To
the Knowledge of Target, it is in compliance in all material respects with all
applicable federal, state and local laws and regulations governing the
environment, public health and safety and employee health and safety (including
all provisions of the Occupational Safety and Health Act (“OSHA”)) and no charge,
complaint, action, suit, proceeding, hearing, investigation, claim, demand or
notice has been filed or commenced against Target and, to the Knowledge of
Target, no such charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand or notice is pending or threatened in
writing.

     

    
      
        
        

      

      
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    4.9     Litigation.  There
are no actions, suits, arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations pending or, to the Knowledge of
Target, threatened against Target or any of its officers or directors in their
capacity as such, or any of its properties or businesses, and Target has no
Knowledge of any facts or circumstances which may reasonably be likely to give
rise to any of the foregoing.  Target is not subject to any order,
judgment, decree, injunction, stipulation or consent order of or with any court
or other Governmental Authority.  Target has not entered into any
agreement to settle or compromise any proceeding pending or threatened in
writing against it which has involved any obligation for which Target has any
continuing obligation.  There are no claims, actions, suits,
proceedings, or investigations pending or, to the Knowledge of Target,
threatened by or against Target with respect to this Agreement or the Articles
of Merger, or in connection with the transactions contemplated hereby, and
Target has no reason to believe there is a valid basis for any such claim,
action, suit, proceeding or investigation.

     

    4.10   Board
Approval.  The Board of Directors of Target, at a meeting duly
called and held prior to execution of this Agreement, duly adopted resolutions,
unanimously approved by those directors present at such meeting: (a) approving
and declaring advisable this Agreement, the Merger and the transactions
contemplated hereby (such approvals having been made in accordance with the Utah
Act); (b) determining that the terms of the Merger are fair to and in the best
interests of Target and its shareholders; (c) recommending that the shareholders
of Target 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.

     

    4.11   Title to
Properties.  To the Knowledge of Target, Target: (a) has good
and marketable title to, and is the lawful owner of, all of the tangible and
intangible assets, properties (including real property); and (b) at the
Effective Time, will have good and marketable title to, and will be the lawful
owner of, all of such tangible and intangible assets, properties and rights, in
any case free and clear of any Liens, except for (i) any Lien for current taxes
not yet due and payable and (ii) Liens that have arisen in the ordinary course
of business, consistent with past practice, which do not, individually or in the
aggregate, materially detract from the value of the assets subject to such Lien,
or materially impair the operations of Target.

     

    4.12   Full
Disclosure.  No representation or warranty by Target contained
in this Agreement contains any untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstances under which it
was made, to make any of the representations and warranties therein not
misleading.

     

    
      
        
        

      

      
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    ARTICLE
V.

    REPRESENTATIONS
OF DESERT HAWK AND MERGER SUB

     

    Desert
Hawk represents and warrants to Target 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.  Desert Hawk is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with all requisite power and authority to own, lease and operate its properties
and to carry on its businesses as they are now being owned, leased, operated and
conducted.  To the Knowledge of Desert Hawk, Desert Hawk is qualified
or licensed to do business, and is in good standing, as a foreign corporation in
each jurisdiction where the nature of its properties owned, leased or operated
by it, and the business transacted by it, requires such qualification or
licensing, except where the failure to be so qualified or licensed and in good
standing would not, individually or in the aggregate, have an Desert Hawk
Material Adverse Effect.  True, correct and complete copies of the
Articles of Incorporation and Bylaws of Desert Hawk, each as amended or restated
as of the date
hereof, have been delivered to Target.  Except with respect to the
ownership by Desert Hawk of all of the issued and outstanding capital stock of
Merger Sub, Desert Hawk (a) has no wholly or partially owned subsidiaries and
(b) owns no economic, voting or management interest in any other
Person.

     

    5.2     Due
Authorization.  Each of Desert Hawk and Merger Sub has full
power and authority to enter into, as applicable, this Agreement and the
Articles of Merger, and each has full power and authority to consummate the
transactions contemplated hereby and thereby.  The execution, delivery
and performance by Desert Hawk and Merger Sub of this Agreement have been duly
and validly approved and authorized by each of their Boards of Directors and by
the sole shareholder of the Merger Sub; and no other actions or proceedings on
the part of either Desert Hawk or Merger Sub are necessary to authorize this
Agreement, the Articles of Merger or the transactions contemplated hereby and
thereby.  Desert Hawk and Merger Sub each has duly and validly
executed and delivered this Agreement, and Merger Sub will duly and validly
execute and deliver the Articles of Merger on the Effective
Date.  This Agreement constitutes the legal, valid and binding
obligation of each of Desert Hawk and Merger Sub, enforceable in accordance with
its terms as to each of Desert Hawk and Merger Sub, 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     Non-Contravention.

     

    (a)           Except
for the filing of the Articles of Merger with the appropriate authorities
pursuant to the Utah Act and filings required by applicable federal and state
securities laws, 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 Desert Hawk or Merger Sub of this Agreement or the Articles of
Merger, or the consummation of the transactions contemplated hereby or thereby,
or for the lawful continued operation of the respective businesses currently
conducted by Desert Hawk or Merger Sub following the Effective
Time.  There are no Contracts to which Desert Hawk or Desert Hawk Sub
is a party that require a novation or consent to the Merger or change of
control, as the case may be, prior to the Effective Time.

     

    
      
        
        

      

      
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    (b)           Except
as would not result in a Desert Hawk Material Adverse Effect, the execution,
delivery and performance by each of Desert Hawk and Merger Sub of this Agreement
and the Articles 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 Contract; (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 Desert Hawk under any
Contract to which Desert Hawk is a party or by which Desert Hawk or any of its
assets or properties are bound; (iv) permit the acceleration of the maturity of
any indebtedness of Desert Hawk or indebtedness secured by Desert Hawk’s assets
or properties; (v) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Desert Hawk; 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 Desert Hawk except as provided for in this
Agreement.

     

    5.4     Capitalization.

     

    (a)           The
authorized capital stock of Desert Hawk consists of an aggregate of 100,000,000
shares of Common Stock, par value $0.01 per share.  On the date hereof
there are issued and outstanding an aggregate of 4,357,408 shares of Common
Stock.  All such issued and outstanding shares of capital stock are
validly issued, fully paid and non-assessable, and issuance thereof was not
subject to preemptive rights or made in compliance therewith.  Upon
the issuance of shares of Desert Hawk Common Stock to Participating Shareholders
as contemplated herein, such shares, when issued, will be validly issued, fully
paid and non-assessable, and will not be subject to preemptive
rights.

     

    (b)             No
shares of Desert Hawk’s capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by
Desert Hawk; (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 Desert
Hawk, or contracts, commitments, understandings or arrangements by which Desert
Hawk is or may become bound to issue additional shares of capital stock of
Desert Hawk 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 Desert Hawk; (iv) there are no
agreements or arrangements under which Desert Hawk is obligated to register the
sale of any of its securities under the Securities Act; (v) there are no
outstanding securities of Desert Hawk which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which Desert Hawk is or may become bound to redeem a security of
Desert Hawk; (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) Desert Hawk 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 Desert Hawk’s
capital stock.

     

    
      
        
        

      

      
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    5.5     Title to
Properties.  To the Knowledge of Desert Hawk, Desert Hawk: (a)
has good and marketable title to, and is the lawful owner of, all of the
tangible and intangible assets, properties (including real property) and rights
reflected as being owned in the Desert Hawk Financial Statements; and (b) at the
Effective Time, will have good and marketable title to, and will be the lawful
owner of, all of such tangible and intangible assets, properties and rights, in
any case free and clear of any Liens, except for (i) any Lien for current taxes
not yet due and payable and (ii) Liens that have arisen in the ordinary course
of business, consistent with past practice, which do not, individually or in the
aggregate, materially detract from the value of the assets subject to such Lien,
or materially impair the operations of Desert Hawk.

     

    5.6     Tax
Matters.  Neither Desert Hawk nor any of Desert Hawk’s
affiliates has taken or agreed to take any action that would prevent the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.  Desert Hawk is not aware of any agreement, plan or other
circumstance that would prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.

     

    5.7     Reorganization
Treatment.

     

    (a)           Intention Regarding
Target.  Desert Hawk has no plan or intention: (i) to liquidate
Target; (ii) to merge Target into another corporation; (iii) to sell or
otherwise dispose of any shares of stock of Target 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 Target 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 Target 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 4.15(a)), or (z) transfers to partnerships
that satisfy the provisions of Treasury Regulation Section
1.368-1(d)(4)(iii)(B).

     

    (b)           Intention Regarding Desert
Hawk Common Stock.  Neither Desert Hawk nor any Person related
to Desert Hawk 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 Desert Hawk issued to the Participating Shareholders
pursuant to this Agreement following the Merger.  Other than pursuant
to this Agreement, neither Desert Hawk nor any Person related to Desert Hawk
within the meaning of Treasury Regulation Sections I.368-1(e)(3), (e)(4) and
(e)(5) has acquired any Target Common Stock in contemplation of the Merger, or
otherwise as part of a plan of which the Merger is a part.

     

    
      
        
        

      

      
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    (c)           Control.  Prior
to the Merger, Desert Hawk will be in control of Merger Sub, and following the
Merger, Desert Hawk will be in control of Target, within the meaning of Section
368(c) of the Code.  Desert Hawk has no plan or intention to cause
Target, after the Effective Time, to issue additional shares of stock that would
result in Desert Hawk losing control of Target within the meaning of Section
368(c) of the Code.

     

    (d)           Business.  Following
the Merger, Desert Hawk intends to continue the historic business of each Target
Party (or, alternatively, if such Target Party has more than one line of
business, intends to continue at least one significant line of such Target
Party’s historic business) or use a significant portion of such Target Party’s
historic business assets in a business, in a manner consistent with Treasury
Regulation Section 1.368-1(d).

     

    (e)           Investment
Company.  Desert Hawk 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 Desert Hawk.

     

    5.8     Environmental.  To
the Knowledge of Desert Hawk, Desert Hawk is in compliance in all material
respects with all applicable federal, state and local laws and regulations
governing the environment, public health and safety and employee health and
safety (including all provisions of OSHA) and no charge, complaint, action,
suit, proceeding, hearing, investigation, claim, demand or notice has been filed
or commenced against Desert Hawk and, to the Knowledge of Desert Hawk, no such
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand or notice is pending or threatened in writing.

     

    5.9     Litigation.  There
are no actions, suits, arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations pending or, to the Knowledge of
Desert Hawk, threatened against Desert Hawk or any of its officers or directors,
in their capacities as such, or any properties or businesses of Desert Hawk or
any of its officers or directors; and, to the Knowledge of Desert Hawk, there
are no facts or circumstances which may reasonably be likely to give rise to any
of the foregoing.  Desert Hawk is not subject to any order, judgment,
decree, injunction, stipulation or consent order of or with any court or other
Governmental Authority; and Desert Hawk has not entered into any agreement to
settle or compromise any proceeding pending or threatened in writing which has
involved any obligation for which Desert Hawk has any continuing
obligation.  There are no claims, actions, suits, proceedings or
investigations pending or, to the Knowledge of Desert Hawk, threatened by or
against Desert Hawk with respect to this Agreement or in connection with the
transactions contemplated hereby, and Desert Hawk has no reason to believe there
is a valid basis for any such claim, action, suit, proceeding or
investigation.

     

    5.10   Compliance with
Laws.  Desert Hawk is not subject to or in default under any
order of any court, Governmental Authority or other agency or arbitration board
or tribunal to which it is or was subject; and Desert Hawk is not in violation
of any Laws (including, but not limited to, those relating to environmental,
safety, building, product safety or health standards or labor or employment
matters), except for such violations as would not, individually or in the
aggregate, have a Desert Hawk Material Adverse Effect.  The businesses
of Desert Hawk have been conducted in material compliance with all Applicable
Laws, except to the extent failure, individually or in the aggregate, would not
have a Desert Hawk Material Adverse Effect.

     

    
      
        
        

      

      
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    5.11   Board
Approval.  The Boards of Directors of each of Desert Hawk and
Merger Sub, at meetings duly called and held or pursuant to written consents
fully executed prior to execution of this Agreement, duly and unanimously
adopted resolutions: (a) approving and declaring advisable this Agreement, the
Merger and the transactions contemplated hereby (such approvals having been made
in accordance with the Utah Act as it relates to Merger Sub and applicable laws
of the State of Nevada as they relate to Desert Hawk); (b) determining that the
terms of the Merger are fair to and in the best interests of Desert Hawk and its
shareholders; and (c) adopting this Agreement, which resolutions have not been
modified, supplemented or rescinded and remain in full force and
effect.

     

    5.12   Takeover
Restrictions.  No Takeover Statute is applicable to the Merger,
except for such statutes or regulations as to which all necessary action has
been taken by Desert Hawk and Merger Sub and their Boards of Directors and the
sole shareholder of the Merger Sub, if required, to permit the consummation of
the Merger in accordance with the terms hereof, nor does Desert Hawk or Merger
Sub have any shareholder rights or similar “poison pill” plans.

     

    5.13   Full
Disclosure.  No representation or warranty by Desert Hawk
contained in this Agreement contains any untrue statement of material fact or
omits to state a material fact necessary, in light of the circumstances under
which it was made, to make any of the representations and warranties therein not
misleading.

     

    ARTICLE
VI.

    COVENANTS

     

    6.1     Implementing
Agreement.  Subject to the terms and conditions hereof, each
party hereto shall use its 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, Target shall allow Desert Hawk and its
representatives access during normal business hours to all of the facilities,
properties, books, Contracts, commitments and records of Target and shall make
the officers and employees of Target available to Desert Hawk and its
representatives as Desert Hawk or its representatives shall from time to time
reasonably request.  Desert Hawk and its representatives shall be
furnished with any and all information concerning Target, which Desert Hawk or
its representatives reasonably request and can be obtained by Target without
unreasonable effort or expense.

     

    (b)           From
and after the date of this Agreement, Desert Hawk shall allow Target and its
representatives access during normal business hours to all of the facilities,
properties, books, Contracts, commitments and records of Desert Hawk and its
subsidiaries and shall make the officers and employees of Desert Hawk available
to Target and its representatives as Target or its representatives shall from
time to time reasonably request.  Target and its representatives shall
be furnished with any and all information concerning Desert Hawk and its
subsidiaries, which Target or its representatives reasonably request and can be
obtained by Desert Hawk without unreasonable effort or expense.

     

    
      
        
        

      

      
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    (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 Target and Desert Hawk
(which for the purposes of this covenant includes their respective subsidiaries
and affiliates), 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
the present business organization of Target and Desert Hawk, as the case may be;
(b) preserve the good and advantageous relationships of Target and Desert Hawk,
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 Target
and Desert Hawk, as the case may be, contained herein to become inaccurate in
any material respect or any of the covenants of Target and Desert Hawk, as the
case may be, to be breached in any material respect.  

     

    6.4     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 Target or Desert Hawk, 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 6.4 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.

     

    6.5     Consents and
Approvals.

     

    (a)           Target
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.  Target 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 Target pursuant to
Applicable Law or Target Material Contract in connection with this Agreement and
the transactions contemplated hereby.

     

    (b)           Desert
Hawk 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.  Desert Hawk 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 Desert Hawk pursuant to Applicable Law or otherwise in connection with this
Agreement and the transactions contemplated hereby.

     

    
      
        
        

      

      
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    6.6     Shareholder
Approval.  As soon as practicable following the date of this
Agreement, Target shall use its best efforts to obtain the approval by its
shareholders of the Merger, this Agreement, and the transactions contemplated
hereby.

     

    6.7     Supplemental
Information.  From time to time prior to the Closing, Target,
on the one hand, and Desert Hawk, 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.

     

    6.8     Tax-Free Reorganization
Treatment.

     

    (a)           Target
and Desert Hawk shall use their commercially reasonable efforts, and cause their
respective subsidiaries 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 Target nor Desert Hawk shall, nor shall they permit any
of their respective subsidiaries 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 Target and Desert Hawk
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.

     

    ARTICLE
VII.

    CONDITIONS
PRECEDENT TO OBLIGATIONS OF DESERT HAWK

     

    The
obligations of Desert Hawk under this Agreement are subject to the satisfaction
(or waiver by Desert Hawk) 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 Target 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.  Target shall have performed and complied in all
material respects with all of its covenants, obligations and agreements
contained in this Agreement to be performed and complied with by it on or prior
to the Closing Date.

     

    
      
        
        

      

      
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    7.3     Consents and
Approvals.  Target shall have received written evidence
satisfactory to Desert Hawk that all consents and approvals required for the
consummation of the transactions contemplated hereby have been obtained, and all
required filings have been made.

     

    7.4     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 Target.  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 Target Material Adverse Effect.

     

    7.5     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 have a Target 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.

     

    7.6     Target Dissenting
Shareholders.  The good faith estimate determined jointly by
Desert Hawk and Target that the aggregate amount to be paid as the fair value of
the shares held by Target Dissenting Shareholders at the Effective Time shall
not exceed $1,000 (the “Dissenter Payment
Threshold”).

     

    7.7     Approval of
Merger.  The holders of Target Common Stock shall have approved
this Agreement and the Merger contemplated hereby in accordance with its
Articles of Incorporation and Bylaws and the Utah Act.

     

    7.8     No
Registration.  Desert Hawk and Merger Sub shall be satisfied
that the issuance of the Desert Hawk Common Stock and the assumption of the
Target Warrants and Target Options in connection with the Merger shall be exempt
from registration under Regulation D of the Securities Act and Section 4(2)
and/or Section 4(6) of the Securities Act and all applicable state securities
laws.

     

    ARTICLE
VIII.

    CONDITIONS
PRECEDENT TO OBLIGATIONS OF TARGET

     

    The
obligations of Target under this Agreement are subject to the satisfaction (or
waiver by Target) 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 Desert Hawk 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.  Desert Hawk shall have performed and complied
in all material respects with all of its covenants, obligations and agreements
contained in this Agreement to be performed and complied with by it on or prior
to the Closing Date.

     

    
      
        
        

      

      
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    8.3     Shareholder Approval and
Other Consents and Approvals.  The holders of Target Common
Stock shall have approved this Agreement and the Merger contemplated hereby in
accordance with its Articles of Incorporation and Bylaws and the Utah
Act.  Desert Hawk shall have received written evidence satisfactory to
Target that all consents and approvals required for the consummation of the
transactions contemplated hereby have been obtained, and all required filings
have been made.

     

    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
Desert Hawk.  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 Desert Hawk 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 have an Desert Hawk 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     Target Dissenting
Shareholders.  The good faith estimate determined jointly by
Desert Hawk and Target that the aggregate amount to be paid as the fair value of
the shares held by Target Dissenting Shareholders at the Effective Time shall
not exceed the Dissenter Payment Threshold.

     

    8.7     No
Registration.  Target shall be satisfied that the issuance of
the Desert Hawk Common Stock and the assumption of the Target Warrants and
Target Options in connection with the Merger shall be exempt from registration
under Regulation D of the Securities Act and Section 4(2) and/or Section 4(6) of
the Securities Act and all applicable state securities laws.

     

    8.8     No Shareholder Vote of
Desert Hawk Required.  The Merger, the issuance of the Desert
Hawk Common Stock and the other transactions contemplated under this Agreement
relating thereto, will not require the approval of Desert Hawk’s
shareholders.

     

    ARTICLE
IX.

    DELIVERIES
AT CLOSING

     

    9.1     Target Closing
Deliveries.  At the Closing, in addition to any other documents
or agreements required under this Agreement, Target shall deliver to Desert Hawk
the following:

     

    (a)           Resolutions
of the Board of Directors and holders of Target Common Stock 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
executed Articles of Merger; and

     

    (c)           All
other instruments and documents that Desert Hawk 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 Target on the Closing
Date; and (ii) to evidence satisfaction of any conditions to
Closing.

     

    
      
        
        

      

      
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    9.2     Desert Hawk Closing
Deliveries.  At the Closing, in addition to any other documents
or agreements required under this Agreement, Desert Hawk shall deliver to Target
the following:

     

    (a)           Resolutions
of the Board of Directors of Desert Hawk 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)           Resolutions
of the Board of Directors and the sole shareholder of the 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;

     

    (c)           The
executed Articles of Merger;

     

    (d)           All
other instruments and documents that Target 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 Desert Hawk on the Closing
Date; and (ii) to evidence satisfaction of any conditions to
Closing.

     

    ARTICLE
X.

    TERMINATION

     

    10.1   Merger 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 Desert Hawk and Target;

     

    (b)           by
Desert Hawk (if Desert Hawk is not then in material breach of its obligations
under this Agreement) if: (i) a material default or breach shall be made by
Target 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
days; (ii) Target makes an amendment or supplement to any Schedule hereto and
such amendment or supplement reflects a Target Material Adverse Effect after the
date of this Agreement; (iii) a Target Material Adverse Change shall have
occurred after the date of this Agreement; (iv) Target enters into any agreement
to effect any transaction described in Section 6.10(b) of this Agreement; (v)
the Board of Directors of Target withdraws its recommendation of the Merger, if
given, or recommends to holders of Target Common Stock the approval of any
transaction other than the Merger; (vi) the holders of Target Common Stock fail
to approve this Agreement as provided in this Agreement; or (vii) the amount
payable to Target Dissenting Shareholders exceeds the Dissenter Payment
Threshold;

     

    (c)           by
Target (if Target is not then in material breach of its obligations under this
Agreement) if: (i) a material default or breach shall be made by Desert Hawk
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 days;
(ii) Desert Hawk makes an amendment or supplement to any Schedule hereto and
such amendment or supplement reflects a Desert Hawk Material Adverse Effect
after the date of this Agreement; (iii) a Desert Hawk Material Adverse Change
shall have occurred after the date of this Agreement; (iv) Desert Hawk enters
into any agreement to effect any transaction described in Section 6.10(b) of
this Agreement; (v) the Board of Directors of Desert Hawk withdraws its
recommendation of the Merger, if given, or recommends to holders of Desert Hawk
Common Stock the approval of any transaction other than the Merger; (vi) holders
of Target Common Stock fail to approve this Agreement as provided in this
Agreement; or (vii) the amount payable to Target Dissenting Shareholders exceeds
the Dissenter Payment Threshold.

     

    
      
        
        

      

      
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    10.2   Effect of
Termination.  In the event of termination of this Agreement
authorized pursuant to Section 10.1 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.  Notwithstanding the foregoing:
(a) if this Agreement is terminated (i) by Target pursuant to Section
10.1(c)(vi) or (ii) by Desert Hawk pursuant to Sections 10.1(b)(i) or (vi), then
Target shall forthwith reimburse Desert Hawk, upon receipt of invoices therefor,
for all reasonable out-of-pocket costs incurred by it in connection with this
Agreement and the transactions contemplated hereby, which costs shall include,
without limitation, reasonable attorneys’ fees; and (b) if this Agreement is
terminated by Target pursuant to Section 10.1(c)(i), then Desert Hawk shall
forthwith reimburse Target, upon receipt of invoices therefor, for all of its
out-of-pocket costs incurred in connection with this Agreement and the
transactions contemplated hereby, which amount shall include, without
limitation, reasonable attorneys’ fees.

     

    ARTICLE
XI.

    MISCELLANEOUS

     

    11.1   Certain
Definitions.  As used herein, the following terms shall have
the meanings set forth below:

     

     “Desert Hawk 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 Desert Hawk 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 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 Desert Hawk or Merger Sub approved or consented to in writing by
Target.

     

    
      
        
        

      

      
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    “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.

     

    “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 authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

     

     “Knowledge” shall mean, as it
relates to Desert Hawk, the actual knowledge of Robert E. Jorgensen, in each
case upon reasonable inquiry; and as it relates to Target, the actual knowledge
of Keith Moe, 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.

     

    “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 of the Target in accordance with the
Articles of Incorporation and Bylaws of Target and the Utah Act.

     

    “Takeover Statute” shall mean any “fair
price,” “moratorium,” “control share acquisition” or other similar anti-takeover
statute of any Governmental Authority.

     

    “Target 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 Target
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 soft tissue repair and spinal disk 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 Target 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 Target approved or consented to in writing by Desert
Hawk.

     

    
      
        
        

      

      
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    11.2   Other
Definitions.  In addition to the terms set forth in Section
11.1 and elsewhere in this Agreement, each of the following terms is defined in
the section set forth opposite such term:

     

    Defined
Term                                                                                                                                

    


    
      	
              Agreement

            	
              Preamble

            
	
              Articles
      of Merger

            	
              §1.2

            
	
              Closing

            	
              §3.1

            
	
              Closing
      Date

            	
              §3.1

            
	
              Code

            	
              Recitals

            
	
              Common
      Conversion Rate

            	
              §2.1(a)

            
	
              Dissenter
      Payment Threshold

            	
              §7.7

            
	
              Effective
      Date

            	
              §1.2

            
	
              Effective
      Time

            	
              §1.2

            
	
              Utah
      Act

            	
              Recitals

            
	
              Desert
      Hawk

            	
              Preamble

            
	
              Desert
      Hawk Common Stock

            	
              §2.1(a)

            
	
              Merger

            	
              Recitals

            
	
              Merger
      Sub

            	
              Preamble

            
	
              OSHA

            	
              §4.16

            
	
              Participating
      Shareholder

            	
              §2.4(a)

            
	
              Surviving
      Corporation

            	
              §1.1

            
	
              Target

            	
              Preamble

            
	
              Target
      Common Stock

            	
              §2.1(a)

            
	
              Target
      Dissenting Shares

            	
              §2.3

            
	
              Target
      Dissenting Shareholders

            	
              §2.3

            


    

    


    11.3   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.

     

    11.4   Amendment.  This
Agreement may only be amended, modified or supplemented pursuant to a written
agreement signed by each of the parties hereto.

     

    11.5   Non-Survival of
Representation and Warranty Breach.  No breach of any of the
representations and warranties in this Agreement by any party hereto, or of any
representation or warranty contained in any instrument delivered pursuant to
this Agreement by any party hereto, shall survive the Effective
Time.  This Section 11.15 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time.

     

    
      
        
        

      

      
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    11.6   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 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.

     

    11.7   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
Target:

    


    Eric Moe,
President

    8921 N.
Indian Trail Road, #288

    Spokane,
WA   99208

    


    and:

     

    If to
Desert Hawk or Merger Sub:

     

    Rick
Havenstrite, President

    1290
Holcomb Avenue

    Reno,
NV  89502

    


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

    


    Ronald N.
Vance, Esq.

    Ronald N.
Vance, P.C.

    1656
Reunion Avenue

    Suite
250

    South
Jordan, Utah  84095

    


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

    


    11.8   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.

     

    
      
        
        

      

      
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    11.9   
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.

     

    11.10 
Applicable
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Utah, without
giving effect to the principles of conflicts of law thereof.

     

    11.11 
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.

     

    11.12 
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.

     

    11.13 
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.

     

    11.14 
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.

     

    11.15 
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.

     

    11.16 
Entire
Understanding.  This Agreement sets forth the entire agreement
and understanding of the parties hereto and supersede all prior agreements,
arrangements and understandings between the parties.

     

    11.17 
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.

     

    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered on the date first above written.

     

    
      
        	
                DESERT
      HAWK GOLD CORP.

              
	 
      	 
      
	
                By:

              	
                /s/ Rick Havenstrite

              
	 
      	
                Rick
      Havenstrite, President

              
	 
      	 
      
	
                DESERT
      HAWK ACQUISITION CORP.

              
	 
      	 
      
	
                By:

              	
                /s/ Robert E. Jorgensen

              
	 
      	
                Robert
      E. Jorgensen, President

              
	 
      	 
      
	
                BLUE
      FIN CAPITAL, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Eric Moe

              
	 
      	
                Eric
      Moe, President

              


      

    

     

    
      
         


      

      
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