Exhibit 10.1
REORGANIZATION AND STOCK PURCHASE AGREEMENT
This REORGANIZATION AND STOCK PURCHASE AGREEMENT dated as of October 24,
2007 (this "Agreement") is by and between Palomine Mining Inc., a Nevada
corporation ("Palomine"), Universal Bioenergy North America, Inc., a Nevada
corporation ("UBNA"); Xxxxxxxxx Financial Limited, a Belizean corporation
("Xxxxxxxxx"); and the stockholders and owners of all of the issued and
outstanding equity of UBNA as set forth on Schedule 1(a) to this Agreement
(collectively, jointly and severally, the "Shareholders")
RECITALS
A. WHEREAS, Palomine desires to acquire directly or indirectly 100%
of the equity of UBNA;
B. WHEREAS, the Shareholders desire to exchange with Palomine all of
the issued and outstanding common stock of UBNA for 2,000,000
shares of common stock of Palomine and thus transfer UBNA to
Palomine;
C. WHEREAS, Xxxxxxxxx is a shareholder of Palomine and owns 2,000,000
shares of Palomine or approximately 46% of the issued and
outstanding common stock of Palomine;
D. WHEREAS, Xxxxxxxxx desires to effect the transactions contemplated
by this Agreement and in order to induce the transactions;
Xxxxxxxxx will contribute 1,800,000 shares of common stock that he
currently owns to the amount of shares being delivered to the
Shareholders hereunder;
E: WHEREAS, the parties hereto intend that the transaction
contemplated hereby shall be completed as a tax-free exchange of
stock.
NOW, THEREFORE, the Shareholders and the respective Boards of Directors of
Palomine and UBNA deem it advisable and in the best interests of their
corporations and the respective shareholders of their corporations that Palomine
acquire 100% of the securities of UBNA, in accordance with the terms and
conditions of this Reorganization and Stock Purchase Agreement.
1. PRE-CLOSING ACTIONS OF PALOMINE AND XXXXXXXXX. Immediately upon
execution of this Agreement and prior to any Closing as set forth
herein, Palomine (and Xxxxxxxxx with respect to item b) shall
undertake the following actions:
(a) The Board of Directors of Palomine shall unanimously
approve and shall deliver or cause to be delivered to Xxxxx
& Xxxxxxx LLP ("Escrow Agent") to be placed in escrow
("Escrow") resolutions with respect to (a) approving all of
the transactions set forth herein; (b) increasing or
directing the size of the Board of Directors to be two
members; (c) electing two persons to the board of directors
of Palomine designated by UBNA, and (d) approving a name
change of the corporation to "Universal Bioenergy, Inc."
(the "Palomine Board Resolutions").
(b) Palomine and Xxxxxxxxx, jointly and severally, shall
deliver or cause to be delivered to Escrow Agent to be
placed in Escrow a total of 2,000,000 shares of Palomine
(200,000 shares directly from Palomine and 1,800,000 shares
directly from Xxxxxxxxx) for delivery to Shareholders (as
set forth on Schedule 1(a) attached hereto) (the "Escrowed
Palomine Shares").
(c) Palomine shall use its reasonable best efforts to prepare
and complete the documents necessary to be filed with
local, state and federal authorities to consummate the
transactions contemplated hereby including the filing of
any necessary reports pursuant to the Securities Exchange
Act of 1934, as amended.
2. PRE-CLOSING ACTION OF UBNA. Immediately upon execution of this
Agreement and prior to the Closing as set forth herein, UBNA shall
undertake the following actions:
(a) The Board of Directors of UBNA shall execute and deliver
resolutions unanimously approving all of the transactions
set forth herein.
(b) The shareholders of UBNA shall deliver to Escrow Agent to
be placed in Escrow certificates representing 5,000 shares
of common stock of UBNA (the "Escrowed UBNA Shares"),
representing 100% of the issued and outstanding equity of
UBNA, for delivery to Palomine at Closing.
(c) During the Due Diligence Period, UBNA shall make available
to Palomine and Palomine's employees, attorneys,
accountants, financial advisors, agents and representatives
during normal business hours all information concerning the
operation, business and prospects of UBNA as may be
reasonably requested by Palomine. UBNA will cooperate with
Palomine for the purpose of permitting Palomine to discuss
UBNA's business and prospects with customers, creditors,
suppliers and other persons having business dealings with
such party, including without limitation providing access
to all employees, consultants, assets, properties, books,
accounts, records, tax returns, contracts and other
documents of UBNA, provided that such access will not
materially interfere with the normal business operations of
UBNA.
3. CONDITIONS TO CLOSING
The parties' obligation to close the proposed Acquisition will be subject
to specified conditions precedent including, but not limited to, the
following:
(a) the representations and warranties of Palomine as set forth in
Section 6 herein shall remain accurate as of the Closing Date and
no material adverse change to the financial condition of Palomine
shall have occurred;
(b) the representations and warranties of UBNA as set forth in Section
7 herein shall remain accurate as of the Closing Date and no
material adverse change in the business or financial condition of
UBNA shall have occurred;
(c) all the documents necessary to be filed with local, state and
federal authorities are prepared;
(d) Palomine shall have provided the board resolutions and any other
approval required to complete the board election; and board
resolutions approving the name change;.
(e) Palomine shall retain its good standing as a publicly traded
company, trading on the over-the-counter bulletin board under the
symbol "POMM.OB";
(f) Palomine shall have prepared and delivered to UBNA within thirty
(30) days of Closing audited and unaudited financial statements
which if filed at the time received would be complete and
compliant with Regulation S-X, Section 310, sufficient for the
combined entities to file any and all filings required by the US
Securities and Exchange Commission and U.S. securities laws and
rules (the "Palomine Financial Statements"); and
(g) UBNA shall have prepared and delivered to Palomine within five (5)
days of closing audited and unaudited financial statements which
if filed at the time received would be complete and compliant with
Regulation S-X, Section 310, sufficient for the combined entities
to file any and all filings required by the US Securities and
Exchange Commission and U.S. securities laws and rules (the "UBNA
Financial Statements").
4. AT THE CLOSING.
(a) At the Closing, Escrow Agent shall release from Escrow the
Palomine Board Resolutions effectuating the election of members
designated by UBNA to the Palomine Board of Directors. The members
of the Board of Directors of Palomine prior to Closing shall
submit resignations at Closing.
(b) At the Closing, Escrow Agent shall release from Escrow the
Escrowed Palomine Shares to the Shareholders.
(c) At the Closing, Escrow Agent shall release from Escrow the
Escrowed UBNA Shares to Palomine.
(d) At the Closing, the existing officers of Palomine shall resign and
be replaced by those officers appointed by the new Board of
Directors.
5. TIMING OF CLOSING. The Closing shall occur upon the satisfaction
of the conditions set forth in this Agreement and upon
instructions from the parties hereto to the Escrow Agent. The
Closing Date shall occur on or before November 30th, 2007 in the
event such conditions are met, unless the Escrow Agent receives
instructions otherwise from the parties or notice from a party
that the conditions set forth herein have not occurred. Unless
otherwise advised in writing by the parties, in the event the
Closing does not occur on or before December 31, 2007, (i) the
Escrow Agent shall return the Escrowed Palomine Shares and the
Palomine Board Resolutions to Palomine; and (ii) the Escrow Agent
shall return the Escrowed UBNA Shares to the shareholders of UBNA.
6. REPRESENTATIONS OF PALOMINE/XXXXXXXXX. Palomine (and Xxxxxxxxx
solely with respect to his shares of common stock of Palomine
contributed to the Escrowed Palomine Shares) represents and
warrants as follows:
(a) OWNERSHIP OF SHARES. As of the Closing Date, the shareholders of
UBNA will become the owners of the Escrowed Palomine Shares. The
Escrowed Palomine Shares will be free from claims, liens or other
encumbrances, except as provided under applicable federal and
state securities laws;
(b) FULLY PAID AND NONASSESSABLE. The Escrowed Palomine Shares
constitute duly and validly issued shares of Palomine, and are
fully paid and nonassessable, and Palomine further represents that
it has the power and the authority to execute this Agreement and
to perform the obligations contemplated hereby;
(c) ORGANIZATION OF PALOMINE; AUTHORIZATION. Palomine is a corporation
duly organized, validly existing and in good standing under the
laws of Nevada with full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate
action of Palomine and this Agreement constitutes a valid and
binding obligation of Palomine; enforceable against it in
accordance with its terms.
(d) CAPITALIZATION. The authorized capital stock of Palomine consists
of 75,000,000 shares of common stock, par value $0.001 per share,
and no shares of preferred stock. As of the Closing Date, Palomine
will have a total of no more than 4,600,000 shares of common stock
issued and outstanding and no shares of preferred stock issued and
outstanding. As of the Closing Date, all of the issued and
outstanding shares of common stock of Palomine are validly issued,
fully paid and non-assessable. There is not and as of the Closing
Date, there will not be outstanding any warrants, options or other
agreements on the part of Palomine obligating Palomine to issue
any additional shares of common or preferred stock or any of its
securities of any kind. Palomine will not issue any shares of
capital stock from the date of this Agreement through the Closing
Date. The Common Stock of Palomine is presently trading on the
over-the-counter electronic bulletin board under the symbol
"POMM.OB".
(e) OWNERSHIP OF PALOMINE SHARES. The delivery of certificates
provided herein for the Escrowed Palomine Shares will result in
the shareholders of UBNA immediate acquisition of record and
beneficial ownership of the Escrowed Palomine Shares, free and
clear of all encumbrances.
(e) NO CONFLICT AS TO PALOMINE. Neither the execution and delivery of
this Agreement nor the consummation of the exchange of the
Palomine Shares will (a) violate any provision of the certificate
of incorporation or by-laws (or other governing instrument) of
Palomine or (b) violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or excuse
performance by any Person of any of its obligations under, or
cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any
encumbrance upon any property or assets of Palomine under, any
material agreement or commitment to which Palomine is a party or
by which its property or assets is bound, or to which any of the
property or assets of Palomine is subject, or (c) violate any
statute or law or any judgment, decree, order, regulation or rule
of any court or other governmental body applicable to Palomine
except, in the case of violations, conflicts, defaults,
terminations, accelerations or encumbrances described in clause
(b) of this Section for such matters which are not likely to have
a material adverse effect on the business or financial condition
of Palomine.
(f) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or
registration with, any Governmental Body is required to be made or
obtained by Palomine in connection with the execution, delivery
and performance of this Agreement by Palomine or the consummation
of the sale of the Escrowed Palomine Shares.
(g) OTHER CONSENTS. Except for consents from the holders of the
Escrowed Palomine Shares, no consent of any Person is required to
be obtained by Palomine to the execution, delivery and performance
of this Agreement or the consummation of the sale of the Palomine
Shares, including, but not limited to, consents from parties to
leases or other agreements or commitments, except for any consent
which the failure to obtain would not be likely to have a material
adverse effect on the business and financial condition of
Palomine.
(h) LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any Court or Governmental body pending
or threatened in writing against or involving Palomine which is
likely to have a material adverse effect on the business or
financial condition of Palomine, or which questions or challenges
the validity of this Agreement. Palomine is not subject to any
judgment, order or decree that is likely to have a material
adverse effect on the business or financial condition of Palomine.
(i) SEC REPORTS. Palomine has filed with the SEC all forms, reports,
schedules, and statements that were required to be filed by it
with the SEC within the three (3) year period ending on the
Closing, and previously has furnished or made available to the
Company accurate and complete copies of all the SEC Documents. As
of their respective dates, the SEC Documents were prepared in
accordance with the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the Securities Act of 1933, as amended
(the "Securities Act") and did not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated in those documents or necessary to make the statements in
those documents not misleading, in light of the circumstances
under which they were made. As of their respective dates, these
reports and statements will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated in them or necessary to make the statements in them not
misleading, in light of the circumstances under which they are
made and these reports and statements will comply in all material
respects with all applicable requirements of the Exchange Act and
the Securities Act. "SEC Documents" means all forms, notices,
reports, schedules, statements, and other documents filed by
Parent with the SEC within the three years from the Closing,
whether or not constituting a "filed" document, and includes all
proxy statements, registration statements, amendments to
registration statements, periodic reports on Forms 10-KSB, 10-QSB,
and 8-K, and annual and quarterly reports to shareholders.
(j) FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements
of Palomine that are included or incorporated in the SEC Documents
were prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as otherwise indicated
in the notes to them) and fairly present the consolidated
financial position, results of operations, and cash flows from
operating, investing, and financing activities of Palomine as of
the dates and for the periods indicated, except that the unaudited
consolidated interim financial statements in the SEC Documents are
subject to normal year-end adjustments and were prepared in
accordance with the instructions to SEC Form 10-QSB and,
accordingly, omit or condense certain footnotes and other
information normally included in financial statements prepared in
accordance with GAAP. The consolidated financial statements of
Palomine that are included or incorporated in any subsequent
report or statement that Palomine mails to its shareholders
generally or files with the SEC during the period after the date
of this Agreement and before the Closing Date will be prepared in
accordance with GAAP applied on a consistent basis during the
periods involved (except as otherwise indicated in them, the notes
to them, or any related report of Palomine's independent
accountants) and will fairly present the financial information
that they purport to present, except that the unaudited,
consolidated interim financial statements will be subject to
normal year-end adjustments and will omit or condense certain
footnotes and other information normally included in financial
statements prepared in accordance with GAAP.
(k) ABSENCE OF CERTAIN CHANGES. From December 31, 2006, to the date
hereof, Palomine has not :
1. suffered damage or destruction of any of its properties or
assets (whether or not covered by insurance) which is
materially adverse to the financial condition of Palomine,
or made any disposition of any of its material properties
or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of
incorporation or by-laws, or other governing instruments,
except as contemplated hereby or required to effect the
transactions set forth herein;
3. other than the Palomine Escrowed Shares or other than the
total issued and outstanding shares set forth in paragraph
6(d) hereto, issued or sold any Equity Securities or other
securities, acquired, directly or indirectly, by redemption
or otherwise, any such Equity Securities, reclassified,
split-up or otherwise changed any such Equity Security, or
granted or entered into any options, warrants, calls or
commitments of any kind with respect thereto;
4. organized any new Subsidiary or acquired any Equity
Securities of any Person or any equity or ownership
interest in any business;
5. borrowed any funds or incurred, or assumed or become
subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability with respect to any
such indebtedness for borrowed money except to Xxxxxxxxx;
6. paid, discharged or satisfied any material claim, liability
or obligation (absolute, accrued, contingent or otherwise),
other than in the ordinary course of business;
7. prepaid any material obligation having a maturity of more
than 90 days from the date such obligation was issued or
incurred;
8. cancelled any material debts or waived any material claims
or rights, except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of
any material patent or registered trademark or copyright or
other intellectual property owned or used by it;
9. granted any general increase in the compensation of
officers or employees (including any such increase pursuant
to any employee benefit plan), except to Xxxxx X. Xxxx;
10. purchased or entered into any contract or commitment to
purchase any material quantity of raw materials or
supplies, or sold or entered into any contract or
commitment to sell any material quantity of property or
assets;
11. made any capital expenditures or additions to property,
plant or equipment or acquired any other property or
assets;
12. written off or been required to write off any notes or
accounts receivable;
13. written down or been required to write down any inventory;
or
14. entered into any collective bargaining or union contract or
agreement.
15. incurred any liability in excess of $20,000.
(l) CONTRACTS AND COMMITMENTS. Palomine is not a party to any:
1. Contract or agreement involving any liability on the part
of Palomine.
2. Lease of personal property;
3. Employee bonus, stock option or stock purchase, performance
unit, profit-sharing, pension, savings, retirement, health,
deferred or incentive compensation, insurance or other
material employee benefit plan (as defined in Section 2(3)
of ERISA) or program for any of the employees, former
employees or retired employees of Palomine;
4. Commitment, contract or agreement that is currently
expected by the management of Palomine to result in any
material loss upon completion or performance thereof;
5. Contract, agreement or commitment with any officer,
employee, agent, consultant, advisor, salesman, sales
representative, value added reseller, distributor or
dealer; or
6. Employment agreement or other similar agreement.
(m) COMPLIANCE WITH LAW. The operations of Palomine have been
conducted in accordance with all applicable laws and regulations
of all Governmental Bodies having jurisdiction over them, except
for violations thereof which are not likely to have a material
adverse effect on the business or financial condition of Palomine.
Palomine has not received any notification of any asserted present
or past failure by it to comply with any such applicable laws or
regulations. Palomine has all material licenses, permits, orders
or approvals from the Governmental Bodies required for the conduct
of its business, and is not in material violation of any such
licenses, permits, orders and approvals. All such licenses,
permits, orders and approvals are in full force and effect, and no
suspension or cancellation of any thereof has been threatened.
(n) TAX MATTERS.
1. Palomine (1) has filed or shall file prior to Closing all
nonconsolidated and noncombined Tax Returns and all
consolidated or combined Tax Returns that include only
Palomine and not UBNA or its other Affiliates (for the
purposes of this Section, such tax Returns shall be
considered nonconsolidated and noncombined Tax Returns)
required to be filed through the date hereof and will have
paid any Tax due through the date hereof with respect to
the time periods covered by such nonconsolidated and
noncombined Tax Returns and shall timely pay any such Taxes
required to be paid by it after the date hereof with
respect to such Tax Returns and (2) shall prepare and
timely file all such nonconsolidated and noncombined Tax
Returns required to be filed after the date hereof and
through the Closing Date and pay all Taxes required to be
paid by it with respect to the periods covered by such Tax
Returns; (B) all such Tax Returns filed pursuant to clause
(A) after the date hereof shall, in each case, be prepared
and filed in a manner consistent in all material respects
(including elections and accounting methods and
conventions) with such Tax Return most recently filed in
the relevant jurisdiction prior to the date hereof, except
as otherwise required by law or regulation. Any such Tax
Return filed or required to be filed after the date hereof
shall not reflect any new elections or the adoption of any
new accounting methods or conventions or other similar
items, except to the extent such particular reflection or
adoption is required to comply with any law or regulation.
2. Palomine represents that prior to Closing, all consolidated
or combined Tax Returns (except those described in
subparagraph (1) above) required to be filed by any person
through the date hereof that are required or permitted to
include the income, or reflect the Activities, operations
and Transactions, of Palomine for any taxable period shall
have been timely filed, and the income, activities,
operations and Transactions of Palomine shall have been
properly included and reflected thereon. Palomine shall
prepare and file, or cause to be prepared and filed, all
such consolidated or combined Tax Returns that are required
or permitted to include the income, or reflect the
activities, operations and Transactions, of Palomine, with
respect to any taxable year or the portion thereof ending
on or prior to the Closing Date, including, without
limitation, Palomine's consolidated federal income tax
return for such taxable years. Prior to Closing, Palomine
will timely file a consolidated federal income tax return
for the taxable year ended December 31, 2006 and such
return shall include and reflect the income, activities,
operations and Transactions of Palomine for the taxable
period then ended, and hereby expressly covenants and
agrees to file a consolidated federal income tax return,
and to include and reflect thereon the income, activities,
operations and Transactions of Palomine for the taxable
period through the Closing Date. All Tax Returns filed
pursuant to this subparagraph (2) after the date hereof
shall, in each case, to the extent that such Tax Returns
specifically relate to Palomine and do not generally relate
to matters affecting other members of Palomine's
consolidated group, be prepared and filed in a manner
consistent in all material respects (including elections
and accounting methods and conventions) with the Tax Return
most recently filed in the relevant jurisdictions prior to
the date hereof, except as otherwise required by law or
regulation. Palomine has paid or will pay all Taxes that
may now or hereafter be due with respect to the taxable
periods covered by such consolidated or combined Tax
Returns.
3. There is no (nor has there been any request for an)
agreement, waiver or consent providing for an extension of
time with respect to the assessment of any Taxes
attributable to Palomine, or its assets or operations and
no power of attorney granted by Palomine with respect to
any Tax matter is currently in force.
4. There is no action, suit, proceeding, investigation, audit,
claim, demand, deficiency or additional assessment in
progress, pending or threatened against or with respect to
any Tax attributable to Palomine or its assets or
operations.
5. All amounts required to be withheld as of the Closing Date
for Taxes or otherwise have been withheld and paid when due
to the appropriate agency or authority.
(o) BORROWING AND GUARANTEES. Except as reflected on its financial
statements for the period ended December 31, 2006, Palomine (a)
does not have any indebtedness for borrowed money except to
Xxxxxxxxx, (b) are not lending or committed to lend any money
(except for advances to employees in the ordinary course of
business), and (c) are not guarantors or sureties with respect to
the obligations of any Person.
7. Representations of UBNA and Shareholders. UBNA and the Shareholders,
collectively, jointly and severally, for their respective rights and
interests represent and warrant as follows:
(a) ORGANIZATION; AUTHORIZATION. UBNA is a corporation duly organized,
validly existing and in good standing under the laws of its
country of organization with full corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate
action of UBNA and this Agreement constitutes a valid and binding
obligation; enforceable against in accordance with its terms. UBNA
has no subsidiaries.
(b) CAPITALIZATION. The authorized capital stock of UBNA consists of
10,000 shares of common stock, par value $0.01 per share. As of
the date of this Agreement, UBNA has 5,000 shares of common stock
issued and outstanding and no shares of preferred stock issued and
outstanding. No shares have otherwise been registered under state
or federal securities laws. As of the Closing Date, all of the
issued and outstanding shares of common stock of UBNA are validly
issued, fully paid and non-assessable and there is not and as of
the Closing Date there will not be outstanding any warrants,
options or other agreements on the part of UBNA obligating any of
UBNA to issue any additional shares of common or preferred stock
or any of its securities of any kind. UBNA will not issue any
shares of capital stock from the date of this Agreement through
the Closing Date. The Escrowed UBNA Shares will be free from
claims, liens or other encumbrances, except as provided under
applicable federal and state securities laws;
(c) NO CONFLICT AS TO UBNA. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
herein will (a) violate any provision of the articles of
incorporation or organization of UBNA; or (b) violate, or be in
conflict with, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or excuse performance by any Person of
any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the
creation or imposition of any Encumbrance upon any property or
assets of UBNA under, any material agreement or commitment to
which UBNA is a party or by which any of their respective property
or assets is bound, or to which any of the property or assets of
any of UBNA is subject, or (c) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or other
Governmental Body applicable to UBNA except, in the case of
violations, conflicts, defaults, terminations, accelerations or
Encumbrances described in clause (b) of this Section for such
matters which are not likely to have a material adverse effect on
the business or financial condition of UBNA, taken as a whole.
(d) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or
registration with, any Governmental Body is required to be made or
obtained by UBNA in connection with the execution, delivery and
performance of this Agreement by UBNA or the consummation of the
transactions contemplated herein.
(e) OTHER CONSENTS. No consent of any Person is required to be
obtained by UBNA to the execution, delivery and performance of
this Agreement or the consummation of the transactions
contemplated herein, including, but not limited to, consents from
parties to leases or other agreements or commitments, except for
any consent which the failure to obtain would not be likely to
have a material adverse effect on the business and financial
condition of UBNA.
(f) BUILDINGS, PLANTS AND EQUIPMENT. The buildings, plants, structures
and material items of equipment and other personal property owned
or leased by UBNA are, in all respects material to the business or
financial condition of UBNA taken as a whole, in good operating
condition and repair (ordinary wear and tear excepted) and are
adequate in all such respects for the purposes for which they are
being used. UBNA has not received notification that it is in
violation of any applicable building, zoning, anti-pollution,
health, safety or other law, ordinance or regulation in respect of
its buildings, plants or structures or their operations, which
violation is likely to have a material adverse effect on the
business or financial condition of UBNA taken as a whole or which
would require a payment by UBNA in excess of $20,000 in the
aggregate, and which has not been cured.
(g) NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor any
portion of the property or leaseholds owned or held by UBNA is
subject to any governmental decree or order to be sold or is being
condemned, expropriated or otherwise taken by any Governmental
Body or other Person with or without payment of compensation
therefore, which action is likely to have a material adverse
effect on the business or financial condition of UBNA, taken as a
whole.
(h) LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending
or threatened in writing against or involving UBNA which is likely
to have a material adverse effect on the business or financial
condition of UBNA, taken as whole, or which would require a
payment by UBNA in excess of $20,000 in the aggregate or which
questions or challenges the validity of this Agreement. UBNA is
not subject to any judgment, order or decree that is likely to
have a material adverse effect on the business or financial
condition of UBNA, taken as a whole, or which would require a
payment by UBNA in excess of $20,000 in the aggregate.
(i) ABSENCE OF CERTAIN CHANGES. UBNA has not:
1. suffered the damage or destruction of any of its properties
or assets (whether or not covered by insurance) which is
materially adverse to the business or financial condition
of UBNA, taken as a whole, or made any disposition of any
of its material properties or assets other than in the
ordinary course of business;
2. made any change or amendment in its certificate of
incorporation or by-laws, or other governing instruments;
3. paid, discharged or satisfied any material claim, liability
or obligation (absolute, accrued, contingent or otherwise),
other than in the ordinary course of business;
4. prepaid any material obligation having a maturity of more
than 90 days from the date such obligation was issued or
incurred;
5. cancelled any material debts or waived any material claims
or rights, except in the ordinary course of business;
6. disposed of or permitted to lapse any rights to the use of
any material patent or registered trademark or copyright or
other intellectual property owned or used by it;
7. granted any general increase in the compensation of
officers or employees (including any such increase pursuant
to any employee benefit plan);
8. purchased or entered into any contract or commitment to
purchase any material quantity of raw materials or
supplies, or sold or entered into any contract or
commitment to sell any material quantity of property or
assets, except (i) normal contracts or commitments for the
purchase of, and normal purchases of, raw materials or
supplies, made in the ordinary course business, (ii) normal
contracts or commitments for the sale of, and normal sales
of, inventory in the ordinary course of business, and (iii)
other contracts, commitments, purchases or sales in the
ordinary course of business;
9. made any capital expenditures or additions to property,
plant or equipment or acquired any other property or assets
(other than raw materials and supplies) at a cost in excess
of $20,000 in the aggregate;
10. written off or been required to write off any notes or
accounts receivable in an aggregate amount in excess of
$20,000;
11. written down or been required to write down any inventory
in an aggregate amount in excess of $20,000;
12. entered into any collective bargaining or union contract or
agreement; or
13. other than the ordinary course of business, incurred any
liability required by generally accepted accounting
principles to be reflected on a balance sheet and material
to the business or financial condition of UBNA taken as a
whole.
(j) LABOR RELATIONS. UBNA is not a party to any collective bargaining
agreement. Except for any matter which is not likely to have a
material adverse effect on the business or financial condition of
UBNA, taken as a whole, (a) UBNA are in compliance with all
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no labor
strike, dispute, slowdown or stoppage actually pending or
threatened against UBNA, (c) no representation question exists
respecting the employees of UBNA, (d) neither UBNA has experienced
any strike, work stoppage or other labor difficulty, and (e) no
collective bargaining agreement relating to employees of UBNA is
currently being negotiated.
(k) COMPLIANCE WITH LAW. The operations of UBNA have been conducted in
accordance with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except for
violations thereof which are not likely to have a material adverse
effect on the business or financial condition of UBNA, taken as a
whole, or which would not require a payment by UBNA in excess of
$20,000 in the aggregate, or which have been cured. UBNA has not
received any notification of any asserted present or past failure
by it to comply with any such applicable laws or regulations. UBNA
has or shall apply for all material licenses, permits, orders or
approvals from the Governmental Bodies required for the conduct of
their businesses, and are not in material violation of any such
licenses, permits, orders and approvals. All such licenses,
permits, orders and approvals are in full force and effect, and no
suspension or cancellation of any thereof has been threatened.
(l) TAX MATTERS.
1. UBNA: (1) has filed or shall file prior to Closing all
nonconsolidated and noncombined Tax Returns and all
consolidated or combined Tax Returns that include only UBNA
and not Palomine or its other Affiliates (for the purposes
of this Section, such tax Returns shall be considered
nonconsolidated and noncombined Tax Returns) required to be
filed through the date hereof and will have paid any Tax
due through the date hereof with respect to the time
periods covered by such nonconsolidated and noncombined Tax
Returns and shall timely pay any such Taxes required to be
paid by it after the date hereof with respect to such Tax
Returns and (2) shall prepare and timely file all such
nonconsolidated and noncombined Tax Returns required to be
filed after the date hereof and through the Closing Date
and pay all Taxes required to be paid by it with respect to
the periods covered by such Tax Returns; (B) all such Tax
Returns filed pursuant to clause (A) after the date hereof
shall, in each case, be prepared and filed in a manner
consistent in all material respects (including elections
and accounting methods and conventions) with such Tax
Return most recently filed in the relevant jurisdiction
prior to the date hereof, except as otherwise required by
law or regulation. Any such Tax Return filed or required to
be filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or
conventions or other similar items, except to the extent
such particular reflection or adoption is required to
comply with any law or regulation.
2. UBNA represents that prior to Closing, all consolidated or
combined Tax Returns (except those described in
subparagraph (1) above) required to be filed by any person
through the date hereof that are required or permitted to
include the income, or reflect the Activities, operations
and Transactions, of UBNA for any taxable period shall have
been timely filed, and the income, activities, operations
and Transactions of UBNA shall have been properly included
and reflected thereon. UBNA shall prepare and file, or
cause to be prepared and filed, all such consolidated or
combined Tax Returns that are required or permitted to
include the income, or reflect the activities, operations
and transactions, of UBNA, with respect to any taxable year
or the portion thereof ending on or prior to the Closing
Date, including, without limitation, UBNA consolidated
federal income tax return for such taxable years. Prior to
Closing, UBNA will timely file a consolidated federal
income tax return for the taxable year ended December 31,
2006 and such return shall include and reflect the income,
activities, operations and transactions of UBNA for the
taxable period then ended, and hereby expressly covenants
and agrees to file a consolidated federal income tax
return, and to include and reflect thereon the income,
activities, operations and Transactions of UBNA for the
taxable period through the Closing Date. All Tax Returns
filed pursuant to this subparagraph (2) after the date
hereof shall, in each case, to the extent that such Tax
Returns specifically relate to UBNA, be prepared and filed
in a manner consistent in all material respects (including
elections and accounting methods and conventions) with the
Tax Return most recently filed in the relevant
jurisdictions prior to the date hereof, except as otherwise
required by law or regulation. Each of UBNA has paid or
will pay all Taxes that may now or hereafter be due with
respect to the taxable periods covered by such consolidated
or combined Tax Returns.
3. All amounts required to be withheld as of the Closing Date
for Taxes or otherwise have been withheld and paid when due
to the appropriate agency or authority.
4. There shall be delivered or made available to Palomine at
or prior to Closing true and complete copies of all income
Tax Returns (or with respect to consolidated or combined
returns, the portion thereof) and any other Tax Returns
requested by Palomine as may be relevant to UBNA or their
assets or operations for any and all periods ending after
June 30, 2007, or for any Tax years which are subject to
audit or investigation by any taxing authority or entity.
(m) Environmental Matters.
1. At all times prior to the date hereof, UBNA have complied
in all material respects with applicable environmental
laws, orders, regulations, rules and ordinances relating to
the Properties (as hereinafter defined), the violation of
which would have a material adverse effect on the business
or financial condition of UBNA, taken as a whole, or which
would require a payment by UBNA in excess of $20,000 in the
aggregate, and which have been duly adopted, imposed or
promulgated by any legislative, executive, administrative
or judicial body or officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that
are material to the operations of UBNA, taken as a whole,
are in full force and effect.
8. Notices.
Any notice which any of the parties hereto may desire to serve upon any
of the other parties hereto shall be in writing and shall be conclusively
deemed to have been received by the party at its address, if mailed,
postage prepaid, United States mail, registered, return receipt
requested, to the following addresses:
If to Palomine Palomine Mining Inc.
0000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile No.: 405.722.0644
Attention: Xxxxx X. Xxxx
If to UBNA: Universal Bioenergy North America, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile No.: ________________
Attn: _____________________ President
If to Xxxxxxxxx: Xxxxxxxxx Financial Limited
#0 Xxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx
Facsimile No.: ________________
Attention: Xxxxxxx X. Xxxxxxx, President
If to the Shareholders: Universal Bioenergy North America, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile No.: ________________
Attn: _____________________ President
9. SUCCESSORS.
This Agreement shall be binding upon and inure to the benefit of the
heirs, personal representatives and successors and assigns of the
parties.
10. CHOICE OF LAW.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Nevada, and the parties submit to the exclusive
jurisdiction of the courts of Nevada in respect of all disputes arising
hereunder.
11. COUNTERPARTS.
This Agreement may be signed in one or more counterparts, all of which
taken together shall constitute an entire agreement.
12. CONFIDENTIAL INFORMATION.
Each of Palomine and UBNA hereby acknowledges and agrees that all
information disclosed to each other whether written or oral, relating to
the other's business activities, its customer names, addresses, all
operating plans, information relating to its existing services, new or
envisioned products or services and the development thereof, scientific,
engineering, or technical information relating to the others business,
marketing or product promotional material, including brochures, product
literature, plan sheets, and any and all reports generated to customers,
with regard to customers, unpublished list of names, and all information
relating to order processing, pricing, cost and quotations, and any and
all information relating to relationships with customers, is considered
confidential information, and is proprietary to, and is considered the
invaluable trade secret of such party (collectively "Confidential
Information"). Any disclosure of any Confidential Information by any
party hereto, its employees, or representatives shall cause immediate,
substantial, and irreparable harm and loss to the other. Each party
understands that the other desires to keep such Confidential Information
in the strictest confidence, and that such party's agreement to do so is
a continuing condition of the receipt and possession of Confidential
Information, and a material provision of this agreement, and a condition
that shall survive the termination of this Agreement. Consequently, each
party shall use Confidential Information for the sole purpose of
performing its obligations as provided herein.
13. PUBLIC ANNOUNCEMENT.
The parties shall make no public announcement concerning this agreement,
their discussions or any other letters, memos or agreements between the
parties relating to this agreement until such time as they agree to the
contents of a mutually satisfactory press release which they intend to
release on the date of execution of this Agreement. Either of the
parties, but only after reasonable consultation with the other, may make
disclosure if required under applicable law.
14. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement and understanding of the
Parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related
to the subject matter hereof. No understanding, promise, inducement,
statement of intention, representation, warranty, covenant or condition,
written or oral, express or implied, whether by statute or otherwise, has
been made by any Party hereto which is not embodied in this Agreement or
the written statements, certificates, or other documents delivered
pursuant hereto or in connection with the transactions contemplated
hereby, and no party hereto shall be bound by or liable for any alleged
understanding, promise, inducement, statement, representation, warranty,
covenant or condition not so set forth.
15. COSTS AND EXPENSES.
Except as otherwise specifically set forth herein, each party will bear
its own attorneys, brokers, investment bankers, agents, and finders
employed by, such party. The parties will indemnify each other against
any claims, costs, losses, expenses or liabilities arising from any claim
for commissions, finder's fees or other compensation in connection with
the transactions contemplated herein which may be asserted by any person
based on any agreement or arrangement for payment by the other party.
16. ATTORNEY'S FEES.
Should any action be commenced between the parties to this Agreement
concerning the matters set forth in this Agreement or the right and
duties of either in relation thereto, the prevailing party in such Action
shall be entitled, in addition to such other relief as may be granted, to
a reasonable sum as and for its Attorney's Fees and Costs.
17. FINDERS.
Palomine represents and warrants that there are no finders or other
parties which have represented Palomine in connection with this
transaction which have not been previously provided with appropriate
compensation. In the event any such finders make a claim for any fee,
share issuance of other compensation in connection with the transactions
contemplated hereby, they shall be the sole responsibility of Palomine.
UBNA represents and warrants that there are no finders or other parties
which have represented UBNA in connection with this transaction. In the
event any such finders make a claim for any fee, share issuance of other
compensation in connection with the transactions contemplated hereby,
they shall be the sole responsibility of UBNA.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
For and on behalf of: Palomine Mining Inc.
a Nevada corporation
By: /s/ Xxxxx X. Xxxx
------------------------------
Xxxxx X. Xxxx
Chief Executive Officer, President, and
Treasurer
For and on behalf of: Universal Bioenergy North America, Inc.
a Nevada corporation
By:
------------------------------
President
For and on behalf of: Xxxxxxxxx Financial Limited,
a ___________ corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
President
For and on behalf of the Shareholders:
WWF INTERNATIONAL LTD.
a ____________ corporation
By: /s/
------------------------------
FORESTER CAPITAL, INC.
a ____________ corporation
By: /s/
------------------------------
LYON GLOBAL INVESTMENT, LLC
a ____________ corporation
By: /s/
------------------------------
XXXXXXXX HOLDINGS, LLC
a ____________ corporation
By: /s/
------------------------------
LAKEWOOD MANAGEMENT, INC.
a ____________ corporation
By: /s/
------------------------------
KAIFENG, LTD
a ____________ corporation
By: /s/
------------------------------
LEMMA II, LLC
a ____________ corporation
By: /s/
------------------------------
By: /s/
------------------------------
LEMMA II, LLC
a ____________ corporation
By: /s/
------------------------------
L & S CAPITAL MANAGEMENT, LLC
a ____________ corporation
By: /s/
------------------------------
CENTAUR PARTNERS, INC.
a ____________ corporation
By: /s/ Yirlania Riuas Marin
------------------------------
SUNRISE FINANCIAL, LLC
a ____________ corporation
By: /s/
------------------------------
Schedule 1(a)
Schedule 1(a)
Number Palomine Stock
Name of Shares Percent of Ownership to be received
---- --------- -------------------- --------------
1. WWF International, Ltd. 500 10% 200,000
2. Forester Capital, Inc. 500 10% 200,000
3. Lyon Global Investment, LLC 500 10% 200,000
4. Xxxxxxxx Holdings, LLC 500 10% 200,000
5. Lakewood Management, Inc. 500 10% 200,000
6. Kaifeng, Ltd. 500 10% 200,000
7. Lemma II, LLC 500 10% 200,000
8. L&S Capital Management, LLC 500 10% 200,000
9. Centaur Partners, Inc. 500 10% 200,000
10. Sunrise Financial, LLC 500 10% 200,000
