AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of
the 18 th
day of July, 2008
AMONG:
BONANZA OIL & GAS, INC. , a corporation formed pursuant
to the laws of the State of Nevada and having an office for
business located at 3000 Richmond Avenue, Suite 400, Houston,
Texas 77098
BORLAND GOOD NORTH, INC. , a body corporate formed pursuant
to the laws of the State of Nevada and a wholly owned subsidiary of
Bonanza
(the
"Acquirer")
AND:
BLACK PEARL ENERGY, INC. , a body corporate formed pursuant
to the laws of the State of Nevada and having an office for
business located at 619 West Texas Avenue, Suite 126, Midland,
Texas 79701
("Black
Pearl")
AND:
The shareholders of Black Pearl as set forth on Exhibit
A
(collectively
the “Black Pearl Shareholders”)
A.
Black
Pearl is a Nevada corporation engaged in the business of acquiring
and developing oil and gas properties;
B.
The
Black Pearl Shareholders own 9,700,000 Black Pearl Shares, which
constitute 55.23% of the presently issued and outstanding Black
Pearl Shares;
C.
Bonanza
is a reporting company whose common stock is quoted on the OTC
Bulletin Board under the symbol BGOI engaged in the business of
acquiring and developing oil and gas properties;
D.
The
respective Boards of Directors of Bonanza, Black Pearl and the
Acquirer deem it advisable and in the best interests of Bonanza,
Black Pearl and the Acquirer that Black Pearl merge with and into
the Acquirer (the "Merger") pursuant to this Agreement and the
Certificate of Merger, and the applicable provisions of the laws of
the State of Nevada; and
E.
It
is intended that the Merger shall qualify for United States federal
income tax purposes as a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as
amended.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1
In
this Agreement the following terms will have the following
meanings:
|
(a)
|
“
Acquisition
Shares ” means the 7,024,667 Bonanza Common Shares to
be issued to the shareholders of Black Pearl at Closing pursuant to
the terms of the Merger;
|
|
(b)
|
“
Agreement
” means this agreement and plan of merger among Bonanza, the
Acquirer, Black Pearl, and the Black Pearl
Shareholders;
|
|
(c)
|
“
Black Pearl
Accounts Payable and Liabilities ” means all accounts
payable and liabilities of Black Pearl, due and owing or otherwise
constituting a binding obligation of Black Pearl as set forth in
the Black Pearl Financial Statements;
|
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(d)
|
“
Black Pearl
Accounts Receivable ” means all accounts receivable
and other debts owing to Black Pearl, as of March 31, 2008 as set
forth in the Black Pearl Financial Statements;
|
|
(e)
|
“
Black Pearl
Assets “ means the undertaking and all the property
and assets of the Black Pearl Business of every kind and
description wheresoever situated including, without limitation,
Black Pearl Equipment, Black Pearl Inventory, Black Pearl Material
Contracts, Black Pearl Accounts Receivable, Black Pearl Cash, Black
Pearl Intangible Assets and Black Pearl Goodwill, and all credit
cards, charge cards and banking cards issued to Black
Pearl;
|
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(f)
|
“
Black Pearl Bank
Accounts ” means all of the bank accounts, lock boxes
and safety deposit boxes of Black Pearl or relating to the Black
Pearl Business a list which has previously been provided to
Bonanza;
|
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(g)
|
“
Black Pearl
Business ” means all aspects of the business conducted
by Black Pearl;
|
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(h)
|
“
Black Pearl
Cash ” means all cash on hand or on deposit to the
credit of Black Pearl on the Closing Date;
|
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(i)
|
“
Black Pearl Debt
to Related Parties ” means the debts owed by Black
Pearl and its subsidiaries to the Black Pearl Shareholders or to
any family member thereof, or to any affiliate, director or officer
of Black Pearl or the Black Pearl Shareholders as described in the
Black Pearl Financial Statements;
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(j)
|
“
Black Pearl
Equipment ” means all machinery, equipment, furniture,
and furnishings used in the Black Pearl Business as set forth in
the Black Pearl Financial Statements;
|
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(k)
|
“
Black Pearl
Financial Statements ” means collectively, the audited
consolidated financial statements of Black Pearl for the period
from inception (January 28, 2008) through March 31, 2008 together
with the unqualified auditors' reports thereon, a true copy of
which is attached as Schedule “B” hereto;
|
|
(l)
|
“
Black Pearl
Goodwill ” means the goodwill of the Black Pearl
Business together with the exclusive right of Bonanza to represent
itself as carrying on the Black Pearl Business in succession of
Black Pearl subject to the terms hereof, and the right to use any
words indicating that the Black Pearl Business is so carried on
including the right to use the name "Black Pearl” or
“Black Pearl Energy" or any variation thereof as part of the
name of or in connection with the Black Pearl Business or any part
thereof carried on or to be carried on by Black Pearl, the right to
all corporate, operating and trade names associated with the Black
Pearl Business, or any variations of such names as part of or in
connection with the Black Pearl Business, all telephone listings
and telephone advertising contracts, all lists of customers, books
and records and other information relating to the Black Pearl
Business, all necessary licenses and authorizations and any other
rights used in connection with the Black Pearl
Business;
|
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(m)
|
“
Black Pearl
Insurance Policies ” means the public liability
insurance and insurance against loss or damage to Black Pearl
Assets and the Black Pearl Business, which have been previously
provided to Bonanza;
|
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(n)
|
“
Black Pearl
Intangible Assets ” means all of the intangible assets
of Black Pearl, including, without limitation, Black Pearl
Goodwill, all trademarks, logos, copyrights, designs, and other
intellectual and industrial property of Black Pearl and its
subsidiaries as set forth in the Black Pearl Financial
Statements;
|
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(o)
|
“
Black Pearl
Inventory ” means all inventory and supplies of the
Black Pearl Business as of March 31, 2008 as set forth in the Black
Pearl Financial Statements;
|
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(p)
|
“
Black Pearl
Material Contracts ” means the burden and benefit of
and the right, title and interest of Black Pearl in, to and under
all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which Black Pearl is entitled in
connection with the Black Pearl Business whereunder Black Pearl is
obligated to pay or entitled to receive the sum of $20,000 or more
including, without limitation, any pension plans, profit sharing
plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors,
officers, directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and those
contracts described in the Black Pearl Financial Statements;
and
|
|
(q)
|
“
Black Pearl
Shares ” means all of the issued and outstanding
shares of Black Pearl's equity stock.
|
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(r)
|
“
Bonanza Accounts
Payable and Liabilities ” means all accounts payable
and liabilities of Bonanza, on a consolidated basis, due and owing
or otherwise constituting a binding obligation of Bonanza and its
subsidiaries as in the Bonanza Financial Statements;
|
|
(s)
|
“
Bonanza Accounts
Receivable ” means all accounts receivable and other
debts owing to Bonanza, on a consolidated basis, as of March 31,
2008 as set forth in the Bonanza Financial Statements;
|
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(t)
|
“
Bonanza
Assets ” means the undertaking and all the property
and assets of the Bonanza Business of every kind and description
wheresoever situated including, without limitation, Bonanza
Equipment, Bonanza Inventory, Bonanza Material Contracts, Bonanza
Accounts Receivable, Bonanza Cash, Bonanza Intangible Assets and
Bonanza Goodwill, and all credit cards, charge cards and banking
cards issued to Bonanza;
|
|
(u)
|
“
Bonanza Bank
Accounts ” means all of the bank accounts, lock boxes
and safety deposit boxes of Bonanza and its subsidiaries or
relating to the Bonanza Business as set forth in the Bonanza
Financial Statements;
|
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(v)
|
“
Bonanza
Business ” means all aspects of any business conducted
by Bonanza and its subsidiaries;
|
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(w)
|
“Bonanza Cash ” means all cash on hand or on
deposit to the credit of BONANZA and its subsidiaries on the
Closing Date;
|
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(x)
|
“
Bonanza Common
Shares ” means the shares of common stock in the
capital of Bonanza;
|
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(y)
|
“
Bonanza
Equipment ” means all machinery, equipment, furniture,
and furnishings used in the Bonanza Business, including, without
limitation, the items more particularly described in the Bonanza
Financial Statements;
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(z)
|
“Bonanza Financial Statements ” means the
financial statements contained within Bonanza’s
Form 10-Q for the quarter ended March 31, 2008 as filed with the
Securities and Exchange Commission on May 15, 2008, a
copy of which is attached hereto as Schedule
“A”;
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(aa)
|
“
Bonanza
Goodwill” means the goodwill of the Bonanza Business
including the right to all corporate, operating and trade names
associated with the Bonanza Business, or any variations of such
names as part of or in connection with the Bonanza Business, all
books and records and other information relating to the Bonanza
Business, all necessary licenses and authorizations and any other
rights used in connection with the Bonanza Business;
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(bb)
|
“
Bonanza Insurance
Policies ” means the public liability insurance and
insurance against loss or damage to the Bonanza Assets and the
Bonanza Business as previously provided by Bonanza to Black
Pearl;
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(cc)
|
“
Bonanza Intangible
Assets " means all of the intangible assets of Bonanza and
its subsidiaries, including, without limitation, Bonanza Goodwill,
all trademarks, logos, copyrights, designs, and other intellectual
and industrial property of Bonanza and its
subsidiaries;
|
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(dd)
|
“
Bonanza
Inventory ” means all inventory and supplies of the
Bonanza Business as of March 31, 2008, as set forth in
as contained in the Bonanza Financial Statements;
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(ee)
|
“
Bonanza Material
Contracts ” means the burden and benefit of and the
right, title and interest of Bonanza and its subsidiaries in, to
and under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which Bonanza or its
subsidiaries are entitled whereunder Bonanza or its subsidiaries
are obligated to pay or entitled to receive the sum of $150,000 or
more including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors,
officers, directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and those
contracts described in the Bonanza Financial
Statements;
|
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(ff)
|
“
Closing
” means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9
hereof;
|
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(gg)
|
“
Closing
Date ” means the day on which all conditions precedent
to the completion of the transaction as contemplated hereby have
been satisfied or waived;
|
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(hh)
|
“
Effective
Time ” means the date of the filing of an appropriate
Certificate of Merger in the form required by the State of Nevada,
which certificate shall provide that the Merger shall become
effective upon such filing;
|
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(ii)
|
“
Merger
” means the merger, at the Effective Time, of Black Pearl and
the Acquirer pursuant to this Agreement and Plan of
Merger;
|
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(jj)
|
“
Merger
Consideration ” means the Acquisition
Shares;
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(kk)
|
“
Place of
Closing ” means the Law Offices of Stephen M. Fleming
PLLC, or such other place as Bonanza and Black Pearl may mutually
agree upon;
|
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(ll)
|
“
State Corporation
Law ” means the general corporation law of the State
of Nevada; and
|
|
(mm)
|
“
Surviving
Company ” means the Acquirer following the merger with
Black Pearl.
|
Any
other terms defined within the text of this Agreement will
have the meanings so ascribed to them.
Captions and Section Numbers
1.2 The
headings and section references in this Agreement are for
convenience of reference only and do not form a part of this
Agreement and are not intended to interpret, define or limit
the scope, extent or intent of this Agreement or any provision
thereof.
Section References and Schedules
1.3 Any
reference to a particular “Article”,
“section”, “paragraph”,
“clause” or other subdivision is to the particular
Article, section, clause or other subdivision of this
Agreement and any reference to a Schedule by letter will mean
the appropriate Schedule attached to this Agreement and by
such reference the appropriate Schedule is incorporated into
and made part of this Agreement. The Schedules to
this Agreement are as follows:
Information concerning Bonanza
|
Schedule
“A”
|
Bonanza’s
Form 10-Q as filed with the Securities and Exchange Commission on
May 15, 2008, a copy of which is attached hereto as Schedule
“A”
|
Information concerning Black Pearl
|
Schedule
“B”
|
Audited
Financial Statements of Black Pearl as of March 31,
2008
|
Severability of Clauses
1.4 If
any part of this Agreement is declared or held to be invalid
for any reason, such invalidity will not affect the validity
of the remainder which will continue in full force and effect
and be construed as if this Agreement had been executed
without the invalid portion, and it is hereby declared the
intention of the parties that this Agreement would have been
executed without reference to any portion which may, for any
reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE MERGER
The Merger
2.1 At
Closing, Black Pearl shall be merged with and into the
Acquirer pursuant to this Agreement and Plan of Merger and the
separate corporate existence of Black Pearl shall cease and
the Acquirer, as it exists from and after the Closing, shall
be the Surviving Company.
Effect of the Merger
2.2 The
Merger shall have the effect provided therefor by the State
Corporation Law. Without limiting the generality of the
foregoing, and subject thereto, at Closing (i) all the rights,
privileges, immunities, powers and franchises, of a public as
well as of a private nature, and all property, real, personal
and mixed, and all debts due on whatever account, including
without limitation subscriptions to shares, and all other
causes in action, and all and every other interest of or
belonging to or due to Black Pearl or the Acquirer, as a
group, subject to the terms hereof, shall be taken and deemed
to be transferred to, and vested in, the Surviving Company
without further act or deed; and all property, rights and
privileges, immunities, powers and franchises and all and
every other interest shall be thereafter as effectually the
property of the Surviving Company, as they were of Black Pearl
and the Acquirer, as a group, and (ii) all debts, liabilities,
duties and obligations of Black Pearl and the Acquirer, as a
group, subject to the terms hereof, shall become the debts,
liabilities and duties of the Surviving Company and the
Surviving Company shall thenceforth be responsible and liable
for all debts, liabilities, duties and obligations of Black
Pearl and the Acquirer, as a group, and neither the rights of
creditors nor any liens upon the property of Black Pearl or
the Acquirer, as a group, shall be impaired by the Merger, and
may be enforced against the Surviving Company.
Certificate of Incorporation; Bylaws; Directors and
Officers
2.3 The
Certificate of Incorporation of the Surviving Company from and
after the Closing shall be the Certificate of Incorporation of
the Acquirer until thereafter amended in accordance with the
provisions therein and as provided by the applicable
provisions of the State Corporation Law. The Bylaws
of the Surviving Company from and after the Closing shall be
the Bylaws of the Acquirer as in effect immediately prior to
the Closing, continuing until thereafter amended in accordance
with their terms, the Certificate of Incorporation of the
Surviving Company and as provided by the State Corporation
Law. The Directors of the Acquirer at the Effective
Time shall continue to be the Directors of the
Acquirer.
Conversion of Securities
2.4 At
the Effective Time, by virtue of the Merger and without any
action on the part of the Acquirer, Black Pearl or the Black
Pearl Shareholders or any other shareholder of Black Pearl,
the shares of capital stock of each of Black Pearl and the
Acquirer shall be converted as follows:
|
(a)
|
Capital Stock of the Acquirer . Each issued and outstanding
share of the Acquirer's capital stock shall continue to be issued
and outstanding. Each stock certificate of the Acquirer
evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the
Acquirer.
|
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(b)
|
Conversion of Black Pearl Shares . Each Black Pearl Share
that is issued and outstanding at the Effective Time shall
automatically be cancelled and extinguished and converted, without
any action on the part of the holder thereof, into the right to
receive at the time and in the amounts described in this Agreement
an amount of Bonanza Common Shares equal to 7,024,667 divided by
the number of Black Pearl Shares outstanding immediately prior to
Closing. All such Black Pearl Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the Acquisition Shares
paid in consideration therefor upon the surrender of such
certificate in accordance with this Agreement.
|
Adherence with Applicable Securities Laws
2.5 The
Black Pearl Shareholders agrees that they are acquiring a pro
rata amount of the Acquisition Shares for investment purposes
and will not offer, sell or otherwise transfer, pledge or
hypothecate any of the Acquisition Shares issued to them
(other than pursuant to an effective Registration Statement
under the Securities Act of
1933 , as amended) directly or indirectly
unless:
|
(a)
|
the
sale is to Bonanza;
|
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(b)
|
the
sale is made pursuant to the exemption from registration under the
Securities Act of
1933,as amended, provided by Rule 144 thereunder;
or
|
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(c)
|
the
Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as
amended, or any applicable United States state laws and
regulations governing the offer and sale of securities, and the
vendor has furnished to Bonanza an opinion of counsel to that
effect or such other written opinion as may be reasonably required
by Bonanza.
|
The Black Pearl
Shareholders acknowledge that the certificates representing
the Acquisition Shares shall bear the following
legend:
NO
SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN
RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT
APPLICABLE TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF BONANZA
Representations and Warranties
3.1 Bonanza
represents and warrants in all material respects to Black
Pearl, with the intent that Black Pearl will rely thereon in
entering into this Agreement and in approving and completing
the transactions contemplated hereby, that:
Bonanza - Corporate Status and Capacity
|
(a)
|
Incorporation . Bonanza is a corporation duly incorporated
and validly subsisting under the laws of the State of Nevada, and
is in good standing with the office of the Secretary of State for
the State of Nevada;
|
|
(b)
|
Carrying on Business . Bonanza is engaged in the business of
acquiring and developing oil and gas properties and is duly
authorized to carry on such business in Texas. The
nature of the Bonanza Business does not require Bonanza to register
or otherwise be qualified to carry on business in any other
jurisdictions;
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(c)
|
Corporate Capacity . Bonanza has the corporate power,
capacity and authority to own the Bonanza Assets and to enter into
and complete this Agreement;
|
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(d)
|
Reporting Status; Listing . Bonanza is required to file
current reports with the Securities and Exchange Commission
pursuant to section 12(g) of the Securities Exchange Act of 1934,
the Bonanza Common Shares are quoted on the OTC Bulletin Board, and
all reports required to be filed by Bonanza with the Securities and
Exchange Commission have been timely filed;
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Acquirer - Corporate Status and Capacity
|
(e)
|
Incorporation . The Acquirer is a corporation duly
incorporated and validly subsisting under the laws of the State of
Nevada, and is in good standing with the office of the Secretary of
State for the State of Nevada;
|
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(f)
|
Corporate Capacity . The Acquirer has the corporate power,
capacity and authority to enter into and complete this
Agreement;
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(g)
|
Authorized Capital . The authorized capital of Bonanza
consists of 60,000,000 Bonanza Common Shares, $0.001 par value, of
which 30,317,986 Bonanza Common Shares are presently issued and
outstanding;
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(h)
|
No Option . Except as set forth in its reports as filed with
the Securities and Exchange Commission (the “34 Act
Reports”), no person, firm or corporation has any agreement
or option or any right capable of becoming an agreement or option
for the acquisition of Bonanza Common Shares or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Bonanza;
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(i)
|
Capacity . Bonanza has the full right, power and authority
to enter into this Agreement on the terms and conditions contained
herein;
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Acquirer Capitalization
|
(j)
|
Authorized Capital . The authorized capital of the Acquirer
consists of 200 shares of common stock, $0.0001 par value, of which
one share of common stock is presently issued and
outstanding;
|
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(k)
|
No Option . No person, firm or corporation has any agreement
or option or any right capable of becoming an agreement or option
for the acquisition of any common or preferred shares in Acquirer
or for the purchase, subscription or issuance of any of the
unissued shares in the capital of Acquirer;
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(l)
|
Capacity . The Acquirer has the full right, power and
authority to enter into this Agreement on the terms and conditions
contained herein;
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Bonanza - Records and Financial Statements
|
|
(m)
|
Charter Documents . The charter documents of Bonanza and the
Acquirer have not been altered since the incorporation of each,
respectively, except as filed in the record books of Bonanza or the
Acquirer, as the case may be;
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(n)
|
Corporate Minute Books . The corporate minute books of
Bonanza and its subsidiaries are complete and each of the minutes
contained therein accurately reflect the actions that were taken at
a duly called and held meeting or by consent without a meeting. All
actions by Bonanza and its subsidiaries which required director or
shareholder approval are reflected on the corporate minute books of
Bonanza and its subsidiaries. Bonanza and its subsidiaries are not
in violation or breach of, or in default with respect to, any term
of their respective Certificates of Incorporation (or other charter
documents) or by-laws.
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(o)
|
Bonanza Financial Statements . The Bonanza Financial
Statements present fairly, in all material respects, the assets and
liabilities (whether accrued, absolute, contingent or otherwise) of
Bonanza, on a consolidated basis, as of the respective dates
thereof, and the sales and earnings of the Bonanza Business during
the periods covered thereby, in all material respects and have been
prepared in substantial accordance with generally accepted
accounting principles consistently applied;
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(p)
|
Bonanza Accounts Payable and Liabilities . There are no
material liabilities, contingent or otherwise, of Bonanza or its
subsidiaries which are not disclosed in the Bonanza Financial
Statements except those incurred in the ordinary course of business
since the date of the Bonanza Financial Statements, and neither
Bonanza nor its subsidiaries have guaranteed or agreed to guarantee
any debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of Bonanza and its subsidiaries as
of March 31, 2008 are set forth in the Bonanza Financial
Statements;
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(q)
|
Bonanza Accounts Receivable . All the Bonanza Accounts
Receivable result from bona fide business transactions and services
actually rendered without, to the knowledge and belief of Bonanza,
any claim by the obligor for set-off or counterclaim;
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(r)
|
No Debt to Related Parties . Except as set forth in the
Bonanza Financial Statements, neither Bonanza nor its subsidiaries
are, and on Closing will not be, materially indebted to any
affiliate, director or officer of Bonanza except accounts payable
on account of bona fide business transactions of Bonanza incurred
in normal course of the Bonanza Business, including employment
agreements, none of which are more than 30 days in
arrears;
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(s)
|
No Related Party Debt to Bonanza. No director or officer or
affiliate of Bonanza is now indebted to or under any financial
obligation to Bonanza or its subsidiaries on any account
whatsoever, except for advances on account of travel and other
expenses not exceeding $5,000 in total;
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(t)
|
No Dividends . No dividends or other distributions on any
shares in the capital of Bonanza have been made, declared or
authorized since the date of Bonanza Financial
Statements;
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(u)
|
No Payments . No payments of any kind have been made or
authorized since the date of the Bonanza Financial Statements to or
on behalf of officers, directors, shareholders or employees of
Bonanza or its subsidiaries or under any management agreements with
Bonanza or its subsidiaries, except payments made in the ordinary
course of business and at the regular rates of salary or other
remuneration payable to them;
|
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(v)
|
No Pension Plans . There are no pension, profit sharing,
group insurance or similar plans or other deferred compensation
plans affecting Bonanza or its subsidiaries;
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|
(w)
|
No Adverse Events . Except as set forth on the 34 Act
Reports, since the date of the Bonanza Financial
Statements
|
|
(i)
|
there
has not been any material adverse change in the financial position
or condition of Bonanza, its subsidiaries, its liabilities or the
Bonanza Assets or any damage, loss or other change in circumstances
materially affecting Bonanza, the Bonanza Business or the Bonanza
Assets or Bonanza’ right to carry on the Bonanza Business,
other than changes in the ordinary course of business,
|
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(ii)
|
there
has not been any damage, destruction, loss or other event (whether
or not covered by insurance) materially and adversely affecting
Bonanza, its subsidiaries, the Bonanza Business or the Bonanza
Assets,
|
|
(iii)
|
there
has not been any material increase in the compensation payable or
to become payable by Bonanza to any of Bonanza’ officers,
employees or agents or any bonus, payment or arrangement made to or
with any of them,
|
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(iv)
|
the
Bonanza Business has been and continues to be carried on in the
ordinary course,
|
|
(v)
|
Bonanza
has not waived or surrendered any right of material
value,
|
|
(vi)
|
Neither
Bonanza nor its subsidiaries have discharged or satisfied or paid
any lien or encumbrance or obligation or liability other than
current liabilities in the ordinary course of business,
and
|
|
(vii)
|
no
capital expenditures in excess of $10,000 individually or $30,000
in total have been authorized or made.
|
Bonanza
- Income Tax
Matters
|
(x)
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Tax Returns . All tax returns and reports of Bonanza and its
subsidiaries required by law to be filed have been filed and are
true, complete and correct, and any taxes payable in accordance
with any return filed by Bonanza and its subsidiaries or in
accordance with any notice of assessment or reassessment issued by
any taxing authority have been so paid;
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(y)
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Current Taxes . Adequate provisions have been made for taxes
payable for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers, or other
arrangements providing for an extension of time with respect to the
filing of any tax return by, or payment of, any tax, governmental
charge or deficiency by Bonanza or its
subsidiaries. Bonanza is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment
including aggressive treatment of income and expenses in filing
earlier tax returns;
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Bonanza
- Applicable
Laws and Legal Matters
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(z)
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Licenses . Bonanza and its subsidiaries hold all licenses
and permits as may be requisite for carrying on the Bonanza
Business in the manner in which it has heretofore been carried on,
which licenses and permits have been maintained and continue to be
in good standing except where the failure to obtain or maintain
such licenses or permits would not have a material adverse effect
on the Bonanza Business;
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(aa)
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Applicable Laws . Neither Bonanza nor its subsidiaries have
been charged with or received notice of breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees to
which they are subject or which apply to them the violation of
which would have a material
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