AGREEMENT AND PLAN OF MERGER
EXHIBIT
2.1
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF
MERGER is made as of the 30th day of December, 2008
AMONG:
YOO
INC., a corporation formed pursuant to the laws of the State of
Delaware and having an office for business located at 00 Xx Xxxxxxx Xx.,
Xxxx Xxxx, Xxxxxx, 00000
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(“YOO”)
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AND:
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IX
ENERGY ACQUISITION, INC., a corporation
formed pursuant to the laws of the State of Delaware and a wholly owned
subsidiary of YOO
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(the "Acquirer") |
AND:
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IX
ENERGY, INC., a corporation formed
pursuant to the laws of the State of Delaware and having an office for
business located at 00 Xxxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, XX 00000
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("IX Energy") |
WHEREAS:
A. IX Energy is a
Delaware corporation which specializes in the design and installation of solar
power systems;
B. The IX Energy
shareholders own an aggregate of 1,108.5030 IX Energy Shares, being 100% of the
presently issued and outstanding IX Energy Shares;
X. XXX is a
reporting company whose common stock is quoted on the OTC Bulletin Board and
which has been engaged in a search for potential merger candidates;
and
D. The
respective Boards of Directors of YOO, IX Energy and the Acquirer deem it
advisable and in the best interests of YOO, IX Energy and the Acquirer that the
Acquirer merge with and into IX Energy (the "Merger") pursuant to this Agreement
and the Certificate of Merger, and the applicable provisions of the laws of the
State of Delaware.
NOW THEREFORE, 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)
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“Acquisition Shares”
means the 16,783,012YOO Common Shares, which shares are to be issued and
delivered to the IX Energy Shareholders at Closing pursuant to the terms
of the Merger;
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(b)
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“Agreement” means this
agreement and plan of merger among YOO, the Acquirer, and IX
Energy;
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(c)
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“Amendment” means an
amendment to YOO’s Articles of Incorporation to: (i) effect a reverse
stock split in a ratio to be determined by the board of directors of YOO;
and (ii) create a series of preferred stock consisting of 10,000,000
shares, no par;
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(d)
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“Amendment Approval”
means (i) the vote by the stockholders of YOO to approve the Amendment and
(ii) the filing by the Company of the Amenemdnt with the Secretary of
State of the State of Delaware and the acceptance of the Amendment by the
Secretary of State of Delaware
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(e)
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“DGCL” means the Delaware
General Corporation Law;
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(f)
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“Closing” means the
completion, on the Closing Date, of the transactions contemplated hereby
in accordance with Article 9 hereof;
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(g)
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“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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(h)
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“Commission” means the
Securities and Exchange Commission;
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(i)
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“Effective Time” means
the date of the filing of an appropriate Certificate of Merger in the form
required by the State of Delaware provided that the Merger shall become
effective as provided in the DGCL;
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(j)
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“Exchange Act” means the
Securities Exchange Act of 1934, as amended;
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(k)
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“Forward Split” means a
2.75 for 1 forward split of the YOO Common Shares to be conducted at
Closing and effective with a record date within 30 days of the Closing
Date;
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(l)
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“Merger” means the
merger, at the Effective Time, of IX Energy and the Acquirer pursuant to
this Agreement;
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(m)
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“YOO Business” means all aspects of any business conducted by YOO and its subsidiaries; | |
(n)
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“YOO Common Shares” means
the shares of common stock, par value $0.0001, in the capital of YOO, it
being understood that YOO intends to effect a 2.75 forward split
contemporaneous with, or immediately following, the Closing to be
effective as soon as it is reasonably practicable;
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(o)
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“YOO Financial
Statements” means, collectively, the audited financial statements
of YOO for the two fiscal years ended December 31, 2007 and 2006, and the
unaudited financial statements of YOO for the period ending September 30,
2008;
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(p)
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“Place of Closing” means
the offices of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, or such other place as
YOO and IX Energy may mutually agree upon;
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(q)
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“PPM” means the private
placement memorandum of IX Energy Holdings, Inc. (including all exhibits
and supplements thereto), dated [________], 2008;
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(r)
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“IX Energy Accounts
Receivable” means all accounts receivable and other amounts owing
to IX Energy;
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2
(s)
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“IX Energy Assets” means
all the property and assets of the IX Energy Business of every kind and
description wherever situated including, without limitation, IX Energy
Inventory, IX Energy Material Contracts, IX Energy Accounts Receivable, IX
Energy Cash, IX Energy Intangible Assets and IX Energy Goodwill, and all
credit cards, charge cards and banking cards issued to IX
Energy;
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(t)
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“IX Energy Business”
means all aspects of the business conducted by IX Energy and its
subsidiaries;
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(u)
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“IX Energy Cash” means
all cash on hand or on deposit to the credit of IX Energy on the Closing
Date;
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(v)
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“IX Energy Financial
Statements” means collectively, the audited financial statements of
IX Energy for the fiscal years ending December 31, 2007 and December 31,
2006, and the unaudited financial statements of IX Energy for the period
ending September 30, 2008, which shall be delivered at Closing, all of
which will be prepared in accordance with United States generally accepted
accounting principles and the requirements of Regulation S-X as
promulgated by the Commission;
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(w)
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“IX Energy Goodwill”
means the goodwill of the IX Energy Business together with the exclusive
right of IX Energy to represent itself as carrying on the IX Energy
Business in succession of IX Energy subject to the terms hereof, and the
right to use any words indicating that the IX Energy Business is so
carried on including the right to use the name "IX Energy” or any
variation thereof as part of the name of or in connection with the IX
Energy Business or any part thereof carried on or to be carried on by IX
Energy, the right to all corporate, operating and trade names associated
with the IX Energy Business, or any variations of such names as part of or
in connection with the IX Energy Business, all telephone listings and
telephone advertising contracts, all lists of customers, books and records
and other information relating to the IX Energy Business, all necessary
licenses and authorizations and any other rights used in connection with
the IX Energy Business;
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(x)
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“IX Energy Intangible
Assets” means all of the intangible assets of IX Energy, including,
without limitation, IX Energy Goodwill, all trademarks, logos, copyrights,
designs, and other intellectual and industrial property of IX
Energy;
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(y)
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“IX Energy Inventory”
means all inventory and supplies of the IX Energy Business as of September
30, 2008 as increased or decreased in the ordinary course of
business;
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(z)
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“IX Energy Material
Contracts” means the burden and benefit of and the right, title and
interest of IX Energy in, to and under all trade and non-trade contracts,
engagements or commitments, whether written or oral, to which IX Energy is
entitled in connection with the IX Energy Business under which IX Energy
is obligated to pay or entitled to receive the sum of Ten Thousand Dollars
($10,000) or more annually 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
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(aa)
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“IX Energy Shares” means
all of the issued and outstanding shares of IX Energy's equity
stock;
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(bb)
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“IX Energy Shareholders”
means all of the holders of the issued and outstanding IX Energy
Shares;
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(cc)
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“Securities Act” means
the Securities Act of 1933, as amended;
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(dd)
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“SEC Reports” means all
forms, reports and documents filed and required to be filed by YOO with
the Commission under the Exchange Act on and after January 1, 2006 through
the date hereof;
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(ee)
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“Subscription Agreements”
means the series of subscription agreements between IX Energy Holdings,
Inc. and a group of investors, pursuant to the PPM, pursuant to which the
investors will subscribe for shares of IX Energy Holdings Inc.’s common
stock;
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(ff)
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“Surviving Company” means
IX Energy following the merger with the Acquirer;
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(gg)
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“2008 Plan” means an
incentive stock option plan intended to qualify under Section 422 of the
Internal Revenue Code, pursuant to which YOO shall be authorized to issue
up to 12,000,000 shares of common stock;
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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
hereof.
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.
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,
the Acquirer shall be merged with and into IX Energy pursuant to this Agreement
and the separate corporate existence of the Acquirer shall cease and IX Energy,
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 therefore by the DGCL. 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 choices in action, and all and every other interest of or belonging to or
due to IX Energy 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
IX Energy and the Acquirer, as a group, and (ii) all debts, liabilities, duties
and obligations of IX Energy 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 IX Energy and the Acquirer, as a
group, and neither the rights of creditors nor any liens upon the property of IX
Energy or the Acquirer, as a group, shall be impaired by the Merger, and may be
enforced against the Surviving Company.
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Articles of Incorporation; Bylaws; Directors and Officers
2.3 The Articles
of Incorporation of the Surviving Company from and after the Closing shall be
the Articles of Incorporation of IX Energy as in effect immediately prior to the
Closing until thereafter amended in accordance with the provisions therein and
as provided by the applicable provisions of the DGCL. The Bylaws of
the Surviving Company from and after the Closing shall be the Bylaws of IX
Energy as in effect immediately prior to the Closing, continuing until
thereafter amended in accordance with their terms, the Articles of Incorporation
of the Surviving Company and as provided by the DGCL. The directors
and officers of the Surviving Company from and after the Closing shall be the
directors and officers of IX Energy immediately prior to the
Closing.
Conversion
of Securities
2.4 At the
Effective Time, by virtue of the Merger and without any action on the part of
the Acquirer or IX Energy, the shares of capital stock of each of IX Energy and
the Acquirer shall be converted as follows:
(a)
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Capital Stock of the
Acquirer. Each issued and outstanding share of the Acquirer's
capital stock shall continue to be issued and outstanding and shall be
converted into one share of validly issued, fully paid, and non-assessable
common stock of the Surviving Company. 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 Surviving
Company.
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(b)
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Conversion of IX
Energy Shares. Each IX Energy 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 15,140.25 Acquisition Shares for each IX Energy
Share. All such IX Energy 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.
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2.5 Dissenting
Shareholders
(a)
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Notwithstanding
any provision of this Agreement to the contrary, each share of IX Energy
common stock that is issued and outstanding immediately prior to the
Closing and that is held by a shareholder of IX Energy who has not voted
in favor of this Agreement or consented thereto in writing and who shall
have otherwise perfected such holder’s dissenters’ rights in accordance
with and as contemplated by Section 262 of the DGCL (each such
shareholder, a “Dissenting Stockholder”, and each share of IX Energy
common stock held by such shareholder, a “Dissenting Share”) shall not be
canceled, extinguished and converted, but shall be entitled to receive
from the Surviving Corporation the value of the shares of IX Energy common
stock held by such Dissenting Stockholder as determined pursuant to
Section 262 of the DGCL; provided, however, that if such Dissenting
Stockholder fails to perfect, or effectively withdraws or loses such
holder’s right to appraisal of and payment for such holder’s shares under
Section 262 of the DGCL, each share of IX Energy common stock of such
Dissenting Stockholder shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Closing, the right to
receive shares of YOO common stock, and such share of IX Energy common
stock shall no longer be a Dissenting Share. In such event, IX
Energy shall deliver the number of shares of YOO common Stock to which
such shareholder is entitled (without interest) upon surrender by such
shareholder of the certificate or certificates representing the shares of
IX Energy common stock held by such
shareholder.
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(b)
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IX
Energy shall provide notice in accordance with the DGCL to each
shareholder that is entitled to appraisal rights; provided that if the IX
Energy shareholders have approved the Merger by written consent pursuant
to Section 228 of the DGCL, IX Energy shall provide notice promptly, and
in any event within five (5) business days, after such stockholder
approval is obtained. IX Energy shall give prompt notice to YOO
of any demands received by IX Energy for appraisal of shares of IX Energy
common stock. The Surviving Corporation shall promptly pay to
any Dissenting Stockholder any and all amounts due and owing to such
holder as a result of any settlement of, or determination by the Court of
Chancery of the State of Delaware with respect to, such
demands.
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF
YOO
Representations
and Warranties
3.1 YOO and the
Acquirer jointly and severally represent and warrant in all material respects to
IX Energy, with the intent that IX Energy will rely thereon in entering into
this Agreement and in approving and completing the transactions contemplated
hereby, that:
YOO
- Corporate Status and Capacity
(a)
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Incorporation.
YOO is a corporation duly incorporated and validly existing under the laws
of the State of Delaware, and is in good standing with the office of the
Secretary of State for the State of Delaware.
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(b)
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Carrying on
Business. YOO and its subsidiaries, currently do not carry on any
material business activity in any jurisdiction. The nature of the YOO
Business does not require YOO and its subsidiaries to register or
otherwise be qualified to carry on business in any jurisdiction other than
the respective states of their organization, where YOO and its
subsidiaries are each dully qualified and authorized to do
business;
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(c)
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Corporate
Capacity. YOO has the corporate power, capacity and authority to
own its assets and to enter into and complete this Agreement. None of
YOO’s subsidiaries has any assets or liabilities;
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(d)
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Reporting Status;
Listing. YOO’s common stock is registered under Section 12(g) of
the Exchange Act and YOO is required to file current reports with the
Commission pursuant to Section 13(a) of the Exchange Act. The YOO Common
Shares are quoted on the OTC Bulletin Board under the symbol “YOOO”. None
of YOO’s subsidiaries has common stock that is registered under Section
12(g) of the Exchange Act and none of YOO’s subsidiaries is required to
file current reports with Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act;
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(e)
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SEC Reports.
YOO has filed all SEC Reports with the Commission under the Exchange Act.
The SEC Reports, at the time filed, complied as to form in all material
respects with the requirements of the Exchange Act. None of the SEC
Reports, including without limitation any financial statements or
schedules included therein, contains any untrue statements of a material
fact or omits to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading;
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Acquirer
- Corporate Status and Capacity
(f)
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Incorporation.
The Acquirer is a corporation duly incorporated and validly existing under
the laws of the State of Delaware, and is in good standing with the office
of the Secretary of State for the State of
Delaware;
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(g)
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Carrying on
Business. Other than corporate formation and organization, the
Acquirer has not carried on business activities to
date;
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(h)
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Corporate
Capacity. The Acquirer has the corporate power, capacity and
authority to enter into and complete this
Agreement;
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YOO
- Capitalization
(i)
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Authorized
Capital. The authorized capital of YOO consists of 100,000,000
shares of common stock, $0.0001 par value, of which 6,000,000 YOO Common
Shares are presently issued and outstanding.
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(j)
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No Option.
Except as provided in, contemplated by, or set forth in this Agreement,
the SEC Reports, the PPM or the Subscription Agreements, 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 of YOO or for the purchase, subscription or issuance of
any of the unissued shares in the capital of
YOO;
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Acquirer
- Capitalization
(k)
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Authorized
Capital. The authorized capital of the Acquirer consists of 300
shares of common stock, of which 300 shares of common stock are presently
issued and outstanding and which are owned by YOO;
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(l)
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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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YOO
- Records and Financial Statements
(m)
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Charter
Documents. The charter documents of YOO and the Acquirer are as set
forth as exhibits to the officers certificate to be delivered at Closing
pursuant to Section 9.3 hereof;
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(n)
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Corporate Minute
Books. YOO 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)
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YOO Financial
Statements. The YOO Financial Statements present fairly, in all
material respects, the assets and liabilities (whether accrued, absolute,
contingent or otherwise) of YOO, including the assets and liabilities, if
any of YOO’s subsidiaries, as of the respective dates thereof, and the
results of operations and changes in financial position of YOO during the
period covered thereby, in all material respects and have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods indicated;
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(p)
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YOO Accounts Payable
and Liabilities. There are no material liabilities, contingent or
otherwise, of YOO or its subsidiaries, which are not reflected in the YOO
Financial Statements except those incurred in the ordinary course of
business since the date of the YOO Financial Statements, and neither YOO
nor its subsidiaries have guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or
corporation;
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(q)
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YOO Accounts
Receivable. There are no accounts receivable of YOO or any of YOO’s
subsidiaries;
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(r)
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No Debt.
Neither YOO nor its subsidiaries are, on the date hereof and on Closing,
materially indebted to any, person or entity or other third party,
including any affiliate, director or officer of YOO;
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(s)
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No Related Party Debt
to YOO. No director or officer or affiliate of YOO or its
subsidiaries, is now indebted to or under any financial obligation to YOO
or its subsidiaries on any account whatsoever, except for advances on
account of travel and other expenses not exceeding One Thousand Dollars
($1,000) in total;
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(t)
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No Dividends.
Except for the Forward Split, no dividends or other distributions on any
shares in the capital of YOO have been made, declared or authorized since
the date of the YOO Financial Statements;
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(u)
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No Payments. No
payments of any kind have been made or authorized since the date of the
YOO Financial Statements to or on behalf of officers, directors,
shareholders or employees of YOO or its subsidiaries or under any
management agreements with YOO 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)
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No Pension
Plans. There are no pension, profit sharing, group insurance or
similar plans or other deferred compensation plans affecting YOO or its
subsidiaries;
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(w)
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No Adverse
Events. Since September 30, 2008,
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(i) |
there
has not been any material adverse change in the properties, results of
operations, financial position or condition (financial or otherwise) of
YOO, its subsidiaries, its assets or liabilities or any damage, loss or
other change in circumstances materially affecting YOO, the YOO Business
or YOO’s right to carry on the YOO Business, other than non-material
changes in the ordinary course of business or as contemplated pursuant to
this Agreement,
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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 YOO, its
subsidiaries, or the YOO Business,
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(iii) |
there
has not been any material increase in the compensation payable or to
become payable by YOO to any of YOO’s officers, employees or agents or any
bonus, payment or arrangement made to or with any of
them,
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(iv) |
the
YOO Business has been and continues to be carried on in the ordinary
course,
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(v) |
YOO
has not waived or surrendered any right of material
value,
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(vi) |
Neither
YOO nor its subsidiaries have discharged, satisfied or paid any lien or
encumbrance or obligation or liability other than current liabilities in
the ordinary course of business; and
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(vii) |
no
capital expenditures have been authorized or made by
YOO.
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YOO
- Income Tax Matters
(x)
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Tax Returns. As
of the Closing Date, all tax returns of YOO 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 YOO and its
subsidiaries, or in accordance with any notice of assessment or
reassessment issued by any taxing authority have been so paid and no
amounts are owed to any taxing authority as of the Closing Date. Without
limiting the generality of the foregoing, YOO hereby repreents that no
amounts are owed to any taxing authorities by YOO and/or its subsidiaries,
for the period commencing on the formation(incorporation) of YOO though
the Closing Date;
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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 YOO or its
subsidiaries. There are no contingent tax liabilities or any
grounds which would prompt a reassessment including aggressive treatment
of income and expenses in filing earlier tax returns for YOO or its
subsidiaries;
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YOO
- Applicable Laws and Legal Matters
(z)
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Licenses. YOO
and its subsidiaries hold all licenses and permits as may be requisite for
carrying on the YOO 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 YOO
Business;
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(aa)
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Applicable
Laws. Neither YOO 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 adverse effect on the
YOO Business, and to YOO’s knowledge, neither YOO nor its subsidiaries are
in breach of any laws, ordinances, statutes, regulations, bylaws, orders
or decrees the contravention of which would result in a material adverse
impact on the YOO Business;
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(bb)
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Pending or Threatened
Litigation. There is no litigation or administrative or
governmental proceeding pending or threatened against or relating to YOO,
its subsidiaries, or the YOO Business nor does YOO have any knowledge of
any act or omission of YOO or its subsidiaries that would form any
material basis for any such action or
proceeding;
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(cc)
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No Bankruptcy.
Neither YOO nor its subsidiaries have made any voluntary assignment or
proposal under applicable laws relating to insolvency and bankruptcy and
no bankruptcy petition has been filed or presented against YOO or its
subsidiaries and no order has been made or a resolution passed for the
winding-up, dissolution or liquidation of YOO or its
subsidiaries;
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(dd)
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Labor Matters.
Neither YOO nor its subsidiaries are party to any collective agreement
relating to the YOO Business with any labor union or other association of
employees and no part of the YOO Business has been certified as a unit
appropriate for collective bargaining or, to the knowledge of YOO, has
made any attempt in that regard;
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(ee)
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Finder's Fees.
Unless otherwise disclosed, neither YOO nor its subsidiaries are party to
any agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become payable
to any third party in connection with the execution and delivery of this
Agreement and the transactions contemplated
herein;
|
Execution
and Performance of Agreement
(ff)
|
Authorization and
Enforceability. The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of YOO
and the Acquirer;
|
(gg)
|
No Violation or
Breach. The execution and performance of this Agreement will
not:
|
9
(i) |
violate
the charter documents of YOO or the Acquirer or result in any breach of,
or default under, any loan agreement, mortgage, deed of trust, or any
other agreement to which YOO or its subsidiaries are a
party,
|
||
(ii) |
give
any person any right to terminate or cancel any agreement or any right or
rights enjoyed by YOO or its subsidiaries,
|
||
(iii) |
result
in any alteration of YOO’s or its subsidiaries’ obligations under any
agreement to which YOO or its subsidiaries are party,
|
||
(iv) |
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the assets
of YOO,
|
||
(v) |
result
in the imposition of any tax liability to YOO or its subsidiaries relating
to the assets of YOO, or
|
||
(vi) |
violate
any court order or decree to which either YOO or its subsidiaries is
subject;
|
The
YOO Business
(hh)
|
Maintenance of
Business. Since the date of the YOO Financial Statements, YOO and
its subsidiaries have not entered into any material agreement or
commitment except in the ordinary course and except as provided in,
contemplated by, or set forth in this Agreement, the PPM, the Subscription
Agreements or in the SEC Reports;
|
(ii)
|
Subsidiaries.
Except for the Acquirer, YOO does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any other
corporation, partnership, joint venture or firm. References in
this Agreement to any subsidiaries of the YOO shall include the
Acquirer and any other subsidiary that YOO may have but has not
disclosed in this Agreement;
|
YOO
- Acquisition Shares
(jj)
|
Acquisition
Shares. The Acquisition Shares when delivered to the holders of IX
Energy Shares pursuant to the Merger shall be validly issued and
outstanding as fully paid and non-assessable shares and the Acquisition
Shares shall be transferable upon the books of YOO, in all cases subject
to the provisions and restrictions of all applicable securities laws;
and
|
(kk)
|
Securities Law
Compliance. Except as set forth in the SEC Reports, YOO
has not issued any shares of its common stock (or securities convertible
into or exercisable for shares of common stock). Neither YOO
nor any person acting on its behalf has taken or will take any action
(including, without limitation, any offering of any securities of YOO
under circumstances which would require the integration of such offering
with the offering of the Acquisition Shares issued to the IX Energy
Shareholders) which subject the issuance or sale of such shares to the IX
Energy Shareholders to the registration requirements of Section 5 of the
Securities Act.
|
Non-Merger
and Survival
3.2 The
representations and warranties of YOO and the Acquirer contained herein are true
and correct as of the date of this Agreement and will be true at and as of
Closing in all material respects as though such representations and warranties
were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by the IX Energy Shareholders, the
representations and warranties of YOO shall survive the Closing for a period of
two (2) years.
10
Indemnity
3.3 Yoo shall
indemnify and save harmless IX Energy and the IX Energy Shareholders from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the JTO to defend
any such claim), resulting from the breach by YOO of any representation,
covenant or warranty made under this Agreement or from any misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished by YOO and/or the Acquirer to IX Energy hereunder.
ARTICLE
4
COVENANTS
OF YOO
Covenants
4.1 YOO covenants
and agrees with IX Energy that YOO will:
(a)
|
Forward
Split. Within 30 days following the Closing, effectuate
a 2.75 for 1 forward split of its Common
Stock.
|
(b)
|
Conduct of
Business. Until the Closing, conduct its business diligently and in
the ordinary course consistent with the manner in which it generally has
been operated up to the date of execution of this
Agreement;
|
(c)
|
Access. Until
the Closing, give the IX Energy Shareholders and their representatives
full access to all of the properties, books, contracts, commitments and
records of Yoo, and furnish to the IX Energy Shareholders and their
representatives all such information as they may reasonably
request;
|
(d)
|
Procure
Consents. Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Merger;
|
(e)
|
Public
Information. Make and keep public information available,
as those terms are understood and defined in Rule 144 (defined below);
and
|
(f)
|
SEC
Filings. File with the Commission in a timely manner,
all reports and other documents required of YOO under either the
Securities Act or the Exchange Act.
|
(g)
|
Tax Returns.
YOO shall on and after the Closing Date be responsible for any taxes owed
or penalties thereon pertaining to the failure of YOO and its subsidiaries
to file tax returns with the appropriate jurisdictions for any periods
prior to Closing.
|
Authorization
4.2 YOO
hereby agrees to authorize and direct any and all federal, state, municipal,
foreign and international governments and regulatory authorities having
jurisdiction respecting YOO and its subsidiaries to release any and all
information in their possession respecting YOO and its subsidiaries to IX
Energy. YOO shall promptly execute and deliver to IX Energy any and all consents
to the release of information and specific authorizations which IX Energy
reasonably requires to gain access to any and all such
information.
Reports
Under the Exchange Act
4.3 With a
view to making available to the IX Energy Shareholders the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the Commission that may at any time permit the IX Energy Shareholders to sell
securities of YOO to the public without registration and without imposing
restrictions arising under the federal securities laws on the purchases thereof
(“Rule 144”), and provided that the applicable holding period imposed by Rule
144 has been met, YOO agrees to furnish to each IX Energy Shareholder, so long
as such IX Energy Shareholder owns YOO Common Shares, promptly upon request, (i)
a written statement by YOO that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of YOO and such other reports and documents so
filed by YOO, and (iii) such other information as may be reasonably requested to
permit the IX Energy Shareholders to sell such securities pursuant to Rule 144
without registration.
11
Survival
4.4 The
covenants set forth in this Article shall survive the Closing for the benefit of
the IX Energy Shareholders and shall continue to survive for a period not to
exceed one year from the Closing Date.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF
IX
ENERGY
Representations
and Warranties
5.1 IX Energy
represents and warrants in all material respects to YOO, with the intent that it
will rely thereon in entering into this Agreement and in approving and
completing the transactions contemplated hereby, that:
IX
Energy- Corporate Status and Capacity
(a)
|
Incorporation.
IX Energy is a corporation duly incorporated and validly existing under
the laws of the State of Delaware, and is in good standing with the office
of the Secretary of State for the State of
Delaware;
|
(b)
|
Carrying on
Business. IX Energy carries on business primarily in the State of
New York and does not carry on any material business activity in any other
jurisdiction. The nature of the IX Energy Business does not require IX
Energy to register or otherwise be qualified to carry on business in any
other jurisdiction;
|
(c)
|
Corporate
Capacity. IX Energy has the corporate power, capacity and authority
to own the IX Energy Assets and to carry on the IX Energy Business and IX
Energy has the corporate power, capacity and authority to enter into and
complete this Agreement;
|
IX
Energy- Capitalization
(d)
|
Authorized
Capital. The authorized capital of IX Energy consists of 1,500
shares of common stock, no par
value;
|
(e)
|
Ownership of IX Energy
Shares. The issued and outstanding share capital of IX Energy
consist of 1,169.6271 common shares (being the IX Energy Shares), which
shares on Closing shall be validly issued and outstanding as fully paid
and non-assessable shares. The IX Energy Shareholders will be at Closing
the registered and beneficial owner of the IX Energy Shares. The IX Energy
Shares owned by the IX Energy Shareholders will on Closing be free and
clear of any and all liens, charges, pledges, encumbrances, restrictions
on transfer and adverse claims whatsoever not created by or through YOO
and/or the Acquirer;
|
|
(f)
|
No
Restrictions. There are no restrictions on the transfer, sale or
other disposition of IX Energy Shares contained in the charter documents
of IX Energy or under any
agreement;
|
12
IX Energy- Records and Financial Statements
(g)
|
Charter
Documents. The charter documents of IX Energy have not been altered
since its incorporation date, except as filed in the record books of IX
Energy, and IX Energy is not in violation or breach of, or in default with
respect to, any term of its Articles of Incorporation (or other charter
documents) or by-laws;
|
(h)
|
IX Energy Financial
Statements. The IX Energy Financial Statements present fairly, in
all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of IX Energy as of the respective dates
thereof, and the results of operations and changes in financial position
of IX Energy during the periods covered thereby, and will be prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods
indicated;
|
(i)
|
IX Energy Accounts
Payable and Liabilities. There are no material liabilities,
contingent or otherwise, of IX Energy which are not reflected in the IX
Energy Financial Statements except those incurred in the ordinary course
of business since the date of the IX Energy Financial
Statements;
|
(j)
|
No Dividends.
No dividends or other distributions on any shares in the capital of IX
Energy have been made, declared or authorized since the date of the IX
Energy Financial Statements;
|
IX
Energy- Income Tax Matters
(k)
|
Tax Returns.
All tax returns and reports of IX Energy required by law to be filed have
been filed and to the best of IX Energy’s knowledge and belief are true,
complete and correct, and any taxes payable in accordance with any return
filed by IX Energy or in accordance with any notice of assessment or
reassessment issued by any taxing authority have been so
paid;
|
(l)
|
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 IX Energy. IX
Energy 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;
|
IX
Energy- Applicable Laws and Legal Matters
(m)
|
Licenses. IX
Energy holds all licenses and permits as may be requisite for carrying on
the IX Energy 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 IX
Energy Business;
|
(n)
|
Applicable
Laws. IX Energy has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees to which it is subject or which applies to it the violation of
which would have a material adverse effect on the IX Energy Business, and,
to IX Energy’s knowledge and belief, IX Energy is not in breach of any
laws, ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact on the IX
Energy Business;
|
(o)
|
Pending or Threatened
Litigation. There is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to IX
Energy, the IX Energy Business, or any of the IX Energy Assets, nor does
IX Energy have any knowledge of any deliberate act or omission of IX
Energy that would form any material basis for any such action or
proceeding;
|
13
(p)
|
No Bankruptcy.
IX Energy has not made any voluntary assignment or proposal under
applicable laws relating to insolvency and bankruptcy and no bankruptcy
petition has been filed or presented against IX Energy and no order has
been made or a resolution passed for the winding-up, dissolution or
liquidation of IX Energy;
|
(q)
|
Labor Matters.
IX Energy is not a party to any collective agreement relating to the IX
Energy Business with any labor union or other association of employees and
no part of the IX Energy Business has been certified as a unit appropriate
for collective bargaining or, to the knowledge of IX Energy, has made any
attempt in that regard and IX Energy has no reason to believe that any
current employees will leave IX Energy's employ as a result of this
Merger;
|
Execution
and Performance of Agreement
(r)
|
Authorization and
Enforceability. The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of IX
Energy and the IX Energy
Shareholders;
|
(s)
|
No Violation or
Breach. The execution and performance of this Agreement will
not
|
(i) |
violate
the charter documents of IX Energy or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement
to which IX Energy is a party,
|
||
(ii) |
except
as provided in, contemplated by, or set forth in the PPM or the
Subscription Agreements, give any person any right to terminate or cancel
any agreement including, without limitation, IX Energy Material Contracts,
or any right or rights enjoyed by IX Energy,
|
||
(iii) |
except
as provided in, contemplated by, or set forth in the PPM or the
Subscription Agreements, result in any material alteration of IX Energy's
obligations under any agreement to which IX Energy is a party including,
without limitation, the IX Energy Material
Contracts,
|
||
(iv) |
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the IX
Energy Assets,
|
||
(v) |
result
in the imposition of any tax liability to IX Energy relating to IX Energy
Assets or the IX Energy Shares, or
|
||
(vi) |
violate
any court order or decree to which IX Energy is
subject;
|
IX
EnergyAssets - Ownership and Condition
(t)
|
No Option.
Except as provided in, contemplated by, or set forth in the PPM or the
Subscription Agreements, no person, firm or corporation has any agreement
or option or a right capable of becoming an agreement for the purchase of
any of the IX Energy Assets;
|
|
(u)
|
IX Energy Material
Contracts. Except as provided in, contemplated by, or set forth in
the PPM or the Subscription Agreements, the IX Energy Material Contracts
constitute all of the material contracts of IX
Energy;
|
(v)
|
No Default.
There has not been any default in any material obligation of IX Energy or
any other party to be performed under any of the IX Energy Material
Contracts, each of which is in good standing and in full force and effect
and unamended, and IX Energy is not aware of any default in the
obligations of any other party to any of the IX Energy Material
Contracts;
|
14
IX
EnergyAssets - IX Energy Goodwill and Other Assets
(w)
|
IX
Energy does not have any knowledge of any infringement by IX Energy of any
patent, trademark, copyright or trade
secret;
|
The
Business of IX Energy
(x)
|
Maintenance of
Business. Since the date of the IX Energy Financial Statements, the
IX Energy Business has been carried on in the ordinary course, and IX
Energy has not entered into any material agreement or commitment except in
the ordinary course or as provided in, contemplated by, or set forth in
the PPM or the Subscription Agreements;
and
|
(y)
|
Subsidiaries.
IX Energy does not have any subsidiaries and does not otherwise own,
directly or indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm.
|
Non-Merger
and Survival
5.2 The
representations and warranties of IX Energy contained herein will be true at and
as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion
of the transactions contemplated hereby, the waiver of any condition contained
herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by YOO, the
representations and warranties of IX Energy shall survive the Closing for a
period of two (2) years.
Indemnity
5.3 IX Energy
agrees to indemnify and save harmless YOO from and against any and all claims,
demands, actions, suits, proceedings, assessments, judgments, damages, costs,
losses and expenses, including any payment made in good faith in settlement of
any claim (subject to the right of IX Energy to defend any such claim),
resulting from the breach by IX Energy of any representation or warranty of IX
Energy made under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished by IX
Energy to YOO hereunder. Legal fees and other costs of defending and
prosecuting this action shall be borne by IX Energy.
ARTICLE
6
COVENANTS
OF IX ENERGY
Covenants
6.1 IX Energy
covenants and agrees with YOO that it will:
(a)
|
Conduct of
Business. Until the Closing, conduct the IX Energy Business
diligently and in the ordinary course consistent with the manner in which
the IX Energy Business generally has been operated up to the date of
execution of this Agreement;
|
(b)
|
Preservation of
Business. Until the Closing, use their best efforts to
preserve the IX Energy Business and the IX Energy
Assets;
|
15
(c)
|
Procure
Consents. Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Merger and to preserve and maintain the IX Energy Assets,
including the IX Energy Material Contracts;
and
|
(d)
|
Reporting and Internal
Controls. From and after the Effective Time, forthwith take all
required actions to implement internal controls on the business of the
Surviving Company to ensure that the Surviving Company complies with
Section 13(b)(2) of the Exchange
Act.
|
Authorization
6.2 IX Energy
hereby agrees to authorize and direct any and all federal, state, municipal,
foreign and international governments and regulatory authorities having
jurisdiction respecting IX Energy to release any and all information
in their possession respecting IX Energy to YOO. IX Energy shall
promptly execute and deliver to YOO any and all consents to the release of
information and specific authorizations which YOO reasonably require to gain
access to any and all such information.
Survival
6.3 The covenants
set forth in this Article shall survive the Closing for the benefit of
YOO.
ARTICLE
7
CONDITIONS
PRECEDENT
Conditions
Precedent in favor of YOO
7.1 YOO’s
obligations to carry out the transactions contemplated hereby are subject to the
fulfillment (or waiver by YOO) of each of the following conditions precedent on
or before the Closing:
(a)
|
all
documents or copies of documents, securities issuances and wire transfers
required to be executed and delivered to YOO as set forth in Article 9
hereof will have been so executed and
delivered;
|
(b)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by IX Energy at or prior to the Closing will have been
complied with or performed;
|
|
(c)
|
title
to the IX Energy Shares held by the IX Energy Shareholders will be free
and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever not created by or through YOO
and/or the Acquirer;
|
(d)
|
the
Certificate of Merger shall be executed by IX Energy in form acceptable
for filing with the Delaware Secretary of
State;
|
(e)
|
reserved;
|
(f)
|
subject
to Article 8 hereof, there will not have
occurred:
|
(i)
|
any
material adverse change in the financial position or condition of IX
Energy, its liabilities or the IX Energy Assets or any damage, loss or
other change in circumstances materially and adversely affecting the IX
Energy Business or the IX Energy Assets or IX Energy's right to carry on
the IX Energy Business, other than changes in the ordinary course of
business, none of which has been materially adverse,
or
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to IX Energy or the IX Energy Business (whether or not
covered by insurance) materially and adversely affecting IX Energy, the IX
Energy Business or the IX Energy
Assets;
|
16
(g)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any; and
|
(h)
|
all
representations and warranties of IX Energy contained herein shall be true
and correct as of the Closing Date.
|
(i)
|
reserved;
|
(j)
|
the
completion of the sale of Units (as defined in the PPM) for an aggregate
purchase price of at least $2,750,000 pursuant to the PPM and the
Subscription Agreements, contemporaneously with the Merger
contemplated by this Agreement;
|
Waiver
by YOO
7.2 The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of YOO and any such condition may be waived in whole or in
part by YOO at or prior to Closing by delivering to IX Energy a written waiver
to that effect signed by YOO. In the event that the conditions precedent set out
in the preceding section are not satisfied on or before the Closing, YOO shall
be released from all obligations under this Agreement.
Conditions
Precedent in Favor of IX Energy
7.3 The
obligations of IX Energy to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a)
|
all
documents or copies of documents required to be executed and delivered to
IX Energy or the IX Energy Shareholders hereunder will have been so
executed and delivered;
|
(b)
|
the
completion of the sale of Units (as defined in the PPM) for an aggregate
purchase price of at least $2,750,000 pursuant to the PPM and the
Subscription Agreements, contemporaneously with the Merger
contemplated by this Agreement;
|
(c)
|
all
directors and officers of YOO shall have tendered their resignations in a
form reasonably acceptable to IX Energy, and the IX Energy’s Shareholders’
nominees shall have been appointed to YOO’s board of directors in a form
reasonably acceptable to IX Energy;
|
(d)
|
IX
Energy shall be in receipt of the IX Energy Financial
Statements;
|
(e)
|
reserved;
|
(f)
|
YOO
shall have no liabilities (or all outstanding liabilities shall be
satisfied at Closing);
|
(g)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by YOO or the Acquirer at or prior to the Closing shall
have been complied with or
performed;
|
(h)
|
IX
Energy shall have completed its review and inspection of the books and
records of YOO and its subsidiaries and shall be reasonably satisfied with
same in all material respects;
|
(i)
|
YOO
shall have delivered an instruction letter to the transfer agent to issue
the Acquisition Shares to be issued pursuant to the terms of the Merger to
the IX Energy Shareholders and the Acquisition Shares will be registered
on the books of YOO in the name of the IX Energy Shareholders at the
Effective Time;
|
17
(j)
|
title
to the Acquisition Shares will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever;
|
(k)
|
the
Certificate of Merger shall be executed by the Acquirer in form acceptable
for filing with the Delaware Secretary of
State;
|
(l)
|
the
insiders of YOO holding restricted shares shall execute a cancellation
agreement in form and substance reasonably satisfactory to IX
Energy;
|
(m)
|
subject
to Article 8 hereof, there will not have
occurred
|
(i)
|
any
material adverse change in the financial position or condition of YOO, its
subsidiaries, their assets or liabilities or any damage, loss or other
change in circumstances materially and adversely affecting YOO or the YOO
Business or YOO’s right to carry on the YOO Business, other than changes
in the ordinary course of business, none of which has been materially
adverse, or
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to YOO or the YOO Business (whether or not covered by
insurance) materially and adversely affecting YOO, its subsidiaries or its
assets;
|
(k)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any; and
|
(l)
|
all
representations and warranties of YOO and the Acquirer contained herein
shall be true and correct as of the Closing
Date.
|
(m)
|
YOO
shall prepare appropriate tax returns for YOO and any of its subsidiaries
as contemplated in Section 3.1(x) and shall submit such return to IX
Energy for its review and comment; YOO shall incorporate any reasonable
comments of IX Energy into such tax returns and after YOO shall file such
returns with the appropriate jurisdiction. YOO shall pay and be
responsible for all filing fees, penalties and payments related to such
tax returns.
|
Waiver
by IX Energy
7.4 The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of IX Energy and any such condition may be waived in whole or
in part by IX Energy at or prior to the Closing by delivering to YOO a written
waiver to that effect signed by IX Energy. In the event that the conditions
precedent set out in the preceding section are not satisfied on or before the
Closing IX Energy shall be released from all obligations under this
Agreement.
Nature
of Conditions Precedent
7.5 The
conditions precedent set forth in this Article are conditions of completion of
the transactions contemplated by this Agreement and are not conditions precedent
to the existence of a binding agreement. Each party acknowledges receipt of the
sum of $1.00 and other good and valuable consideration as separate and distinct
consideration for agreeing to the conditions precedent in favor of the other
party or parties set forth in this Article.
Confidentiality
7.6 Notwithstanding any
provision herein to the contrary, the parties hereto agree that the existence
and terms of this Agreement are confidential and that if this Agreement is
terminated pursuant to the preceding section the parties agree to return to one
another any and all financial, technical and business documents delivered to the
other party or parties in connection with the negotiation and execution of this
Agreement and shall keep the terms of this Agreement and all information and
documents received from IX Energy and YOO and the contents thereof confidential
and not utilize nor reveal or release same, provided, however, that YOO may be
required to issue news releases regarding the execution and consummation of this
Agreement and file a Current Report on Form 8-K with the Commission respecting
the proposed Merger contemplated hereby together with such other documents as
are required to maintain the currency of YOO’s filings with the
Commission.
18
ARTICLE 8
RISK
Material
Change in the Business of IX Energy
8.1 If any
material loss or damage to the IX Energy Business occurs prior to Closing and
such loss or damage, in YOO's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, YOO shall, within two (2) days
following any such loss or damage, by notice in writing to IX Energy, at its
option, either:
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
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(b)
|
elect
to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition precedent to
YOO's obligations to carry out the transactions contemplated hereby, be
vested in IX Energy or otherwise adequately secured to the satisfaction of
YOO on or before the Closing Date.
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Material
Change in the YOO Business
8.2 If any
material loss or damage to the YOO Business occurs prior to Closing and such
loss or damage, in IX Energy's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, IX Energy shall, within two (2)
days following any such loss or damage, by notice in writing to YOO, at its
option, either:
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
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(b)
|
elect
to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition precedent to
IX Energy's obligations to carry out the transactions contemplated hereby,
be vested in YOO or otherwise adequately secured to the satisfaction of IX
Energy on or before the Closing
Date.
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ARTICLE
9
CLOSING
Closing
9.1 The Merger
and the other transactions contemplated by this Agreement will be closed on or
before December [__], 2008, in accordance with the closing procedure set out in
this Article.
Documents
to be Delivered by IX Energy
9.2 On or before
the Closing, IX Energy will deliver or cause to be delivered to
YOO:
(a)
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an
executed copy of this Agreement;
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(b)
|
all
reasonable consents or approvals required to be obtained by IX Energy for
the purposes of completing the Merger and preserving and maintaining the
interests of IX Energy under any and all IX Energy Material Contracts and
in relation to IX Energy Assets;
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(c)
|
an
officers certificate containing articles, bylaws, and certified copies of
such resolutions of the shareholders and directors of IX Energy as are
required to be passed to authorize the execution, delivery and
implementation of this Agreement;
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(d)
|
an
acknowledgement from IX Energy of the satisfaction of the conditions
precedent set forth in section 7.3
hereof;
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(e)
|
such
other documents as YOO may reasonably require to give effect to the terms
and intention of this Agreement.
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Documents
to be Delivered by YOO
9.3 On or before
the Closing, YOO and the Acquirer shall deliver or cause to be delivered to IX
Energy:
(a)
|
an
executed copy of this Agreement;
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(b)
|
an
irrevocable instruction letter to the transfer agent to issue share
certificates representing the Acquisition Shares duly registered in the
names of the IX Energy
Shareholders;
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(c)
|
an
officers certificate containing articles, bylaws, and certified copies of
such resolutions of the directors of YOO and the Acquirer as are required
to be passed to authorize the execution, delivery and implementation of
this Agreement;
|
(d)
|
a
certified copy of a resolution of the directors of YOO dated as of the
Closing Date appointing the nominees of the IX Energy Shareholders to the
board of directors of YOO;
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(e)
|
resignations
of each of the officers and directors of YOO in a form reasonably
acceptable to IX Energy;
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(f)
|
a
cancellation agreement executed by the YOO affiliates whereby the
affiliates agree to cancel their shares in the aggregate amount of
4,000,000 shares (pre-Forward
Split);
|
(g)
|
an
acknowledgement from YOO of the satisfaction of the conditions precedent
set forth in section 7.1 hereof;
|
(h)
|
such
other documents as IX Energy may reasonably require to give effect to the
terms and intention of this
Agreement.
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ARTICLE
10
POST-CLOSING
MATTERS
General
10.1
Forthwith after the Closing, YOO and IX Energyagree to use all their best
efforts to:
(a)
|
file
the Certificate of Merger with the Secretary of State of Delaware;
and
|
(b)
|
issue
a news release reasonably acceptable to each party reporting the Closing;
and
|
(c)
|
file
a Form 8-K with the Securities and Exchange Commission disclosing the
terms of this Agreement which includes audited financial statements of IX
Energy as well as pro forma financial information of IX Energy and YOO as
required by Regulation S-X as promulgated by the Commission (all at no
cost to the IX Energy Shareholders);
and
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20
(d)
|
conduct
a 2.75 for 1 forward split of the YOO Common Stock;
and
|
(e)
|
take
such steps as required to change the name of YOO to “IX Energy
Holdings,Inc” as of the earliest practical date following the date hereof
but in any event within 60 days of the Closing;
and
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(f)
|
hold
a special meeting of the shareholders of YOO or obtain a written consent
of the shareholders of YOO holding in excess of a majority of the issued
and outstanding shares of common stock of YOO for the purpose of obtaining
the Amendment Approval as of the earliest practical date following the
date hereof, but in no event within 120 calendar days of the
Closing. YOO agrees to file the Amendment with the Secretary of
State of the State of Delaware on or about the 10th
day following the date on which the Amendment Approval is obtained;
and.
|
(g)
|
adopt
the 2008 Plan, and hold a special meeting of the shareholders of YOO or
obtain a written consent of the shareholders of YOO holding in excess of a
majority of the issued and outstanding shares of common stock of YOO for
the purpose of approving the 2008 Plan as soon as of the earliest
practical date following the date hereof but in any event within 120 days
of the Closing.
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ARTICLE
11
GENERAL
PROVISIONS
Arbitration
11.1 The parties
hereto shall attempt to resolve any dispute, controversy, difference or claim
arising out of or relating to this Agreement by negotiation in good
faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within thirty (30) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration.
Any
action or proceeding seeking to enforce any provision of, or based upon any
right arising out of, this Agreement shall be settled by binding arbitration by
a panel of three (3) arbitrators in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and governed by the laws of the
State of Delaware (without regard to the choice-of-law rules or principles of
that jurisdiction). Judgment upon the award may be entered in any
court located in the State of New York, and all the parties hereto hereby
expressly waive any objections or defense based upon lack of personal
jurisdiction.
Each of
the plaintiff and defendant party to the arbitration shall select one (1)
arbitrator (or where multiple plaintiffs and/or defendants exist, one (1)
arbitrator shall be chosen collectively by such parties comprising the
plaintiffs and one (1) arbitrator shall be chosen collectively by those parties
comprising the defendants) and then the two (2) arbitrators shall mutually agree
upon the third arbitrator. Where no agreement can be reached on the
selection of either a third arbitrator or an arbitrator to be named by either a
group of plaintiffs or a group of defendants, any implicated party may apply to
a judge of the courts of the State of New York, to name an
arbitrator. Process in any such action or proceeding may
be served on any party anywhere in the world.
Indemnification
Provisions
11.2 Notice to
Indemnifying Party. If any party (the "Indemnitee") receives notice
of any claim or the commencement of any action or proceeding with respect to
which the other party (or parties) is obligated to provide indemnification (the
"Indemnifying Party") pursuant to Sections 3.3 or 5.3 hereof, the Indemnitee
shall give the Indemnifying Party written notice thereof within a reasonable
period of time following the Indemnitee’s receipt of such
notice. Such notice shall describe the claim in reasonable detail and
shall indicate the amount (estimated if necessary) of the losses that have been
or may be sustained by the Indemnitee. The Indemnifying Party may,
subject to the other provisions of this Section 11.2, compromise or defend, at
such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any such matter involving the asserted liability of the Indemnitee in
respect of a third-party claim. If the Indemnifying Party elects to
compromise or defend such asserted liability, it shall within thirty (30) days
(or sooner, if the nature of the asserted liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee, shall reasonably
cooperate, at the request and reasonable expense of the Indemnifying Party, in
the
21
compromise
of, or defense against, such asserted liability. The Indemnifying
Party will not be released from any obligation to indemnify the Indemnitee
hereunder with respect to a claim without the prior written consent of the
Indemnitee, unless the Indemnifying Party delivers to the Indemnitee a duly
executed agreement settling or compromising such claim with no monetary
liability to or injunctive relief against the Indemnitee and a complete release
of the Indemnitee with respect thereto. The Indemnifying Party shall
have the right to conduct and control the defense of any third-party claim
made for which it has been provided notice hereunder. All costs and
fees incurred with respect to any such claim will be borne by the Indemnifying
Party. The Indemnitee will have the right to participate, but not
control, at its own expense, the defense or settlement of any such claim;
provided, that if the Indemnitee and the Indemnifying Party shall have
conflicting claims or defenses, the Indemnifying Party shall not have control of
such conflicting claims or defenses and the Indemnitee shall be entitled to
appoint a separate counsel for such claims and defenses at the cost and expense
of the Indemnifying Party. If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the Indemnifying Party
any books, records or other documents within its control that are reasonably
required for such defense.
Notice
11.3 Any notice
required or permitted to be given by any party will be deemed to be given when
in writing and delivered to the address for notice of the intended recipient by
personal delivery, prepaid certified or registered mail, or
Facsimile. Any notice delivered by mail shall be deemed to have been received on
the fourth business day after and excluding the date of mailing, except in the
event of a disruption in regular postal service in which event such notice shall
be deemed to be delivered on the actual date of receipt. Any notice delivered
personally or by Facsimile shall be deemed to have been received on the actual
date of delivery.
Addresses
for Service
11.4
The address for service of notice of each of the parties hereto is as
follows:
(a)
|
YOO
or the Acquirer:
|
45 Or
Hachaim Xx.
Xxxx
Xxxx, Xxxxxx 00000
Attn: Zvi
Pessahc Xxxxx, President
Phone: (000)
000-0-000-0000
With a
copy to:
Xxxxxx
& Jaclin, LLP
000 Xxxxx
0 Xxxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxx, Esq.
Phone
(000) 000-0000
Fax (000)
000-0000
(b)
|
IX
Energy:
|
IX
Energy, Inc.
000 Xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000
Attn: Xxxxxx
Xxxxxxx, Chief Executive Officer
Phone:
000-000-0000
Facsimile:
[_________]
22
With a
copy to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
Xxxxxxxxx, Esq.
Phone: (000)
000-0000
Telecopier: (000)
000-0000
Change
of Address
11.5 Any party
may, by notice to the other parties change its address for notice to some other
address in North America and will so change its address for notice whenever the
existing address or notice ceases to be adequate for delivery by hand. A post
office box may not be used as an address for service.
Further
Assurances
11.6 Each of the
parties will execute and deliver such further and other documents and do and
perform such further and other acts as any other party may reasonably require to
carry out and give effect to the terms and intention of this
Agreement.
Time
of the Essence
11.7 Time is
expressly declared to be the essence of this Agreement.
Entire
Agreement
11.8 The
provisions contained herein constitute the entire agreement among IX Energy, the
Acquirer and YOO respecting the subject matter hereof and supersede all previous
communications, representations and agreements, whether verbal or written, among
IX Energy, the Acquirer and YOO with respect to the subject matter
hereof.
Enurement
11.9 This
Agreement will enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
Assignment
11.10 This Agreement is
not assignable without the prior written consent of the parties
hereto.
Expenses
11.11 Each party agrees
to pay, without right of reimbursement from any other party and regardless of
whether or not the transaction is consummated, the costs incurred by it in
connection with this transaction, including legal fees and other costs
incidental to the negotiation of the terms of the transaction and the
preparation of related documentation; notwithstanding anything to the contrary
herein.
Counterparts
11.12 This Agreement may
be executed in counterparts, each of which when executed by any party will be
deemed to be an original and all of which counterparts will together constitute
one and the same Agreement. Delivery of executed copies of this Agreement by
Facsimile will constitute proper delivery, provided that originally executed
counterparts are delivered to the parties within a reasonable time
thereafter.
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Applicable Law
11.13 This
Agreement is subject to the laws of the State of New York.
Termination
11.14 This
Agreement may only be terminated at any time prior to the Closing
Date:
(a) upon mutual
written consent authorized by the Board of Directors of YOO and IX Energy;
or
(b) by either YOO
or IX Energy if the Closing shall not have been consummated by the close of
business on September 30, 2008.
[Remainder
of page intentionally left blank.]
24
IN WITNESS WHEREOF the parties
have executed this Agreement effective as of the day and year first above
written.
YOO INC. | |
By: /s/ Zvi Pessahc Xxxxx | |
Xxx Pessahc
Xxxxx, Chief Executive Officer
|
|
IX ENERGY ACQUSITION, INC. | |
By: /s/ Zvi Pessahc Xxxxx | |
Xxx Pessahc
Xxxxx, President
|
|
IX ENERGY, INC. | |
By: /s/ Xxxxxx Xxxxxxx | |
Xxxxxx Xxxxxxx,
Chief Executive Officer
|
25