REVERSAL AGREEMENT
AGREEMENT
(this
“Agreement”), dated as of August 8, 2007, by and between Xxxxxxxx Uranium Corp.,
a Nevada corporation (the “Parent”), Xxxxxx XxXxxxxx (“XxXxxxxx”) and Xxxxxxxx
Uranium Holdings, Inc., an Arizona corporation (the “Company”). The Parent,
XxXxxxxx and the Company are each a “Party” and referred to collectively herein
as the “Parties.”
WHEREAS,
the Parent and the Company, together with Xxxxxxxx Acquisition Corp.
(“Acquisition Subsidiary”), were parties to an Agreement and Plan of Merger and
Reorganization, dated as of July 11, 2007 (the “Merger Agreement”), pursuant to
which Acquisition Subsidiary merged with and into the Company (the “Merger”),
with the Company remaining as the surviving entity;
WHEREAS,
in connection with the Merger the 100 shares of common stock of the Company,
$0.01 par value per share (“Company Shares”) issued and outstanding immediately
prior to the effective time of the Merger, all of which were owned by XxXxxxxx,
were converted into an aggregate of 31,000,000 shares
(the “Merger Shares”) of common stock, $0.001 par value per share, of the Parent
(“Parent Common Stock”);
WHEREAS,
to date the Parent has invested a net amount of $535,500 and has advanced
certain expenses of $22,427.30, or an aggregate of $557,927.30 (the “Capital
Infusion”) in the proposed operations of the Company; and
WHEREAS,
in light of recent developments in the public equity and debt markets, as well
as other considerations, the Parties desire to reverse the Merger and, in
connection therewith, return the Merger Shares to the Parent’s treasury and to
repay the Capital Infusion.
1. PURCHASE
AND SALE OF COMPANY SHARES
(a) Purchase
of Company Shares.
XxXxxxxx agrees to purchase at Closing (as defined below), and the Parent agrees
to sell to XxXxxxxx at the Closing, the Company Shares. As payment of the
purchase price (the “Purchase Price”) for the Company Shares, XxXxxxxx shall
deliver the Merger Shares to the Company, accompanied by a stock power duly
endorsed in blank.
(b) Closing.
The
Closing of the transactions contemplated by this Agreement shall take place
simultaneously with the execution of this Agreement, or as soon thereafter
as is
practicable, at the offices of Gottbetter & Partners, LLP, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) Capital
Infusion.
As
additional consideration for the purchase and sale of the Company shares, the
Company shall repay the Capital Infusion to the Parent. The Company shall repay
the Capital Infusion by delivering to the Parent a promissory note (the
“Reversal Note”) in the principal amount of Five Hundred Fifty Seven Thousand
Nine Hundred Twenty Seven Dollars and Thirty Cents ($557,927.30). The terms
of
the Reversal Note, and the security for the payment therefore, are set forth
in
the accompanying Reversal Loan and Control Share Pledge and Security Agreement
and related documents (together with this Agreement, the “Transaction
Documents”).
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2. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company (together with XxXxxxxx, as appropriate) represents and warrants to
the
Parent as follows:
(a) Organization.
Company
is a corporation duly existing under the laws of its jurisdiction of
incorporation and qualified and licensed to do business in any jurisdiction
in
which the conduct of its business or its ownership of property requires that
it
be so qualified, except where the failure to be so qualified would not have
a
material adverse effect on the business, operations, condition (financial or
otherwise), property or prospects of Company, or the ability of Company to
carry
out their respective obligations under the Transaction Documents (a “Company
Material Adverse Effect”).
(b) Subsidiaries.
Company
has no Subsidiaries. For purposes of this Agreement, a “Subsidiary” means any
corporation, partnership, joint venture or other entity in which Company has,
directly or indirectly, an equity interest representing 50% or more of the
capital stock thereof or other equity interests therein.
(c) Authorization.
All
corporate action on the part of XxXxxxxx and of Company and its officers,
directors and stockholders necessary for the authorization, execution, delivery
and performance of all obligations of Company and XxXxxxxx under the Transaction
Documents to which any of them may be a party have been taken. This Agreement
and the other Transaction Documents, when executed and delivered by Company
and
XxXxxxxx, as appropriate, shall constitute legal, valid and binding obligations
of Company and XxXxxxxx, enforceable against Company and XxXxxxxx in accordance
with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
and the enforcement of debtors’ obligations generally and by general principles
of equity, regardless of whether enforcement is pursuant to a proceeding in
equity or at law.
(d) Absence
of Conflicts.
The
execution, delivery and performance of this Agreement and each of the other
Transaction Documents is not in conflict with nor does it constitute a breach
of
any provision contained in Company’s organizational documents, nor will it
constitute an event of default under any material agreement to which Company
or
XxXxxxxx is a party or by which Company or XxXxxxxx is bound.
(e) Consents
and Approvals.
Company
has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all governmental
authorities and agencies that are necessary for the continued operation of
Company’s business as currently conducted, or are required by law.
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(f) Capitalization.
The
authorized and outstanding share capital of Company consists of 100,000 shares
of common stock, $0.01 par value, of which 100 shares are outstanding as of
the
date of this Agreement. There are no subscriptions, convertible securities,
options, warrants or other rights (contingent or otherwise) currently
outstanding to purchase any of the authorized but unissued capital stock of
Company. Company has no obligation to issue shares of its capital stock, or
subscriptions, convertible securities, options, warrants, or other rights
(contingent or otherwise) to purchase any shares of its capital stock or to
distribute to holders of any of its equity securities, any evidence of
indebtedness or asset. No shares of Company capital stock are subject to a
right
of withdrawal or a right of rescission under any applicable securities law.
There are no outstanding or authorized stock appreciation, phantom stock or
similar rights with respect to the Company. To the Knowledge of the Company,
except as otherwise contemplated by this Agreement, there are no agreements
to
which the Company is a party or by which it is bound with respect to the voting
(including without limitation voting trusts or proxies), registration under
any
applicable securities laws, or sale or transfer (including without limitation
agreements relating to pre-emptive rights, rights of first refusal, co-sale
rights or “drag-along” rights) of any securities of the Company. To the
Knowledge of the Company, there are no agreements among other parties, to which
the Company is not a party and by which it is not bound, with respect to the
voting (including without limitation voting trusts or proxies) or sale or
transfer (including without limitation agreements relating to rights of first
refusal, co-sale rights or “drag-along” rights) of any securities of the
Company.
(g) Litigation.
There
are no actions, suits, claims, investigations, arbitrations or other legal
or
administrative proceedings, to the Knowledge of Company, threatened against
Company at law or in equity, and to Company’s Knowledge, there is no basis for
any of the foregoing. There are no unsatisfied judgments, penalties or awards
against or affecting Company or its businesses, properties or assets. Company
is
not in default, and no event has occurred which with the passage of time or
giving of notice or both would constitute a default by Company with respect
to
any order, writ, injunction or decree known to or served upon Company of any
court or of any foreign, federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or
foreign. There is no action or suit by Company pending or threatened against
others. Company has complied with all laws, rules, regulations and orders
applicable to its current business, operations, properties, assets, products
and
services the violation of which would have a Company Material Adverse Effect.
There is no existing law, rule, regulation or order, and Company has no
Knowledge of any proposed law, rule, regulation or order, whether foreign,
federal or state, that would prohibit or materially restrict Company from,
or
otherwise materially adversely affect Company in, conducting its businesses
in
any jurisdiction in which it is now conducting business.
(h) As
defined in this Agreement, “Knowledge” of Company means the actual knowledge by
a director or officer of Company of a particular fact or circumstance or such
knowledge as may reasonably be imputed to such person as a result of his actual
knowledge of other facts or circumstances as well as any other knowledge which
such person would have possessed had they made reasonable inquiry of appropriate
employees and agents of Company with respect to the matter in
question.
3
(i) Absence
of Certain Events.
To the
Company’s Knowledge, there is no existing condition, event or series of events
which reasonably would be expected to have a Company Material Adverse
Effect.
(j) Governmental
Permits.
Company
holds all licenses, franchises, permits and other governmental authorizations
which are required for the conduct of any aspect of Company’s business, as
presently conducted and as presently contemplated to be conducted, including,
but not limited to, all such business operations contemplated by, or incident
to, the Transactions. All such licenses, franchises, permits and other
governmental authorizations are valid and current, and Company has not received
any notice that any governmental authority intends to cancel, terminate or
not
renew any such license, franchise, permit or other governmental authorization.
Company has conducted and is conducting its business in compliance with the
requirements, standards, criteria and conditions set forth in such licenses,
franchises, permits and other governmental authorizations, and all laws and
regulations applicable thereto, and is not in violation of any of the foregoing.
The consummation of the transactions contemplated hereunder will not alter
or
impair or require changes to any such license, franchise, permit or other
governmental authorization.
(k) Merger
Shares.
XxXxxxxx owns the Merger Shares free and clear of all liens and encumbrances,
and has the full power and authority to transfer the Merger Shares to the
Parent.
(l) Investment
Purpose.
XxXxxxxx is acquiring the Company Shares for his own account for investment
only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the Securities Act of 1933, as amended (the “Securities Act”). XxXxxxxx agrees
not to sell, hypothecate or otherwise transfer the Company Shares unless the
securities are registered under the Federal and applicable state securities
laws
or unless, in the opinion of counsel satisfactory to the Company, an exemption
from such law is available.
(m) Reliance
on Exemptions.
XxXxxxxx understands that the Company Shares are being offered and sold to
it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Parent is relying in
part
upon the truth and accuracy of, and XxXxxxxx’x compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
XxXxxxxx set forth herein in order to determine the availability of such
exemptions and the eligibility of XxXxxxxx to acquire such
securities.
3. REPRESENTATIONS
AND WARRANTIES OF THE PARENT
(a) Organization.
Parent
is a corporation duly existing under the laws of its jurisdiction of
incorporation and qualified and licensed to do business in any jurisdiction
in
which the conduct of its business or its ownership of property requires that
it
be so qualified, except where the failure to be so qualified would not have
a
material adverse effect on the business, operations, condition (financial or
otherwise), property or prospects of Parent, or the ability of Parent to carry
out their respective obligations under the Transaction Documents (a “Parent
Material Adverse Effect”).
4
(b) Subsidiaries.
Parent
has no Subsidiaries other than the Company. For purposes of this Agreement,
a
“Subsidiary” means any corporation, partnership, joint venture or other entity
in which Parent has, directly or indirectly, an equity interest representing
50%
or more of the capital stock thereof or other equity interests
therein.
(c) Authorization.
All
corporate action on the part of Parent and its officers, directors and
stockholders necessary for the authorization, execution, delivery and
performance of all obligations of Parent under the Transaction Documents to
which any of them may be a party have been taken. This Agreement and the other
Transaction Documents, when executed and delivered by Parent, shall constitute
legal, valid and binding obligations of Parent, enforceable against Parent
in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors’ rights and the enforcement of debtors’ obligations generally and by
general principles of equity, regardless of whether enforcement is pursuant
to a
proceeding in equity or at law.
(d) Absence
of Conflicts.
The
execution, delivery and performance of this Agreement and each of the other
Transaction Documents is not in conflict with nor does it constitute a breach
of
any provision contained in Parent’s organizational documents, nor will it
constitute an event of default under any material agreement to which Parent
is a
party or by which Parent is bound.
(e) Consents
and Approvals.
Parent
has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all governmental
authorities and agencies that are necessary for the continued operation of
Parent’s business as currently conducted, or are required by law.
(f) Litigation.
There
are no actions, suits, claims, investigations, arbitrations or other legal
or
administrative proceedings, to the Knowledge of Parent, threatened against
Parent at law or in equity, and to Parent’s Knowledge, there is no basis for any
of the foregoing. There are no unsatisfied judgments, penalties or awards
against or affecting Parent or its businesses, properties or assets. Parent
is
not in default, and no event has occurred which with the passage of time or
giving of notice or both would constitute a default by Parent with respect
to
any order, writ, injunction or decree known to or served upon Parent of any
court or of any foreign, federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or
foreign. There is no action or suit by Parent pending or threatened against
others. Parent has complied with all laws, rules, regulations and orders
applicable to its current business, operations, properties, assets, products
and
services the violation of which would have a Parent Material Adverse Effect.
There is no existing law, rule, regulation or order, and Parent has no Knowledge
of any proposed law, rule, regulation or order, whether foreign, federal or
state, that would prohibit or materially restrict Parent from, or otherwise
materially adversely affect Parent in, conducting its businesses in any
jurisdiction in which it is now conducting business.
5
(g) As
defined in this Agreement, “Knowledge” of Parent means the actual knowledge by a
director or officer of Parent of a particular fact or circumstance or such
knowledge as may reasonably be imputed to such person as a result of his actual
knowledge of other facts or circumstances as well as any other knowledge which
such person would have possessed had they made reasonable inquiry of appropriate
employees and agents of Parent with respect to the matter in
question.
(h) Absence
of Certain Events.
To the
Parent’s Knowledge, there is no existing condition, event or series of events
which reasonably would be expected to have a Parent Material Adverse
Effect.
(i) Governmental
Permits.
Parent
holds all licenses, franchises, permits and other governmental authorizations
which are required for the conduct of any aspect of Parent’s business, as
presently conducted and as presently contemplated to be conducted, including,
but not limited to, all such business operations contemplated by, or incident
to, the Transactions. All such licenses, franchises, permits and other
governmental authorizations are valid and current, and Parent has not received
any notice that any governmental authority intends to cancel, terminate or
not
renew any such license, franchise, permit or other governmental authorization.
Parent has conducted and is conducting its business in compliance with the
requirements, standards, criteria and conditions set forth in such licenses,
franchises, permits and other governmental authorizations, and all laws and
regulations applicable thereto, and is not in violation of any of the foregoing.
The consummation of the transactions contemplated hereunder will not alter
or
impair or require changes to any such license, franchise, permit or other
governmental authorization.
(j) Company
Shares.
Parent
owns the Company Shares free and clear of all liens and encumbrances, and has
the full power and authority to transfer the Company Shares to XxXxxxxx, subject
to such liens and encumbrances as are contemplated by the Transaction
Documents.
(k) Investment
Purpose.
The
Parent is acquiring the Merger Shares for its own account for investment only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the Securities Act. The Parent agrees not to sell, hypothecate or otherwise
transfer the Merger Shares unless the securities are registered under the
Federal and applicable state securities laws or unless, in the opinion of
counsel satisfactory to the Parent, an exemption from such law is
available.
(l) Reliance
on Exemptions.
The
Parent understands that the Merger Shares are being offered and sold to it
in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that XxXxxxxx is relying in part
upon the truth and accuracy of, and the Parent’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Parent set forth herein in order to determine the availability of such
exemptions and the eligibility of the Parent to acquire such
securities.
6
4. EMPLOYMENT
AGREEMENTS
The
Employment Agreements between the Parent and each of XxXxxxxx, Xxxxx Xxxxxx
and
Xxxxxx Xxxxx shall be cancelled and of no further force and effect as of the
Closing.
5. NAME
CHANGE
The
Parent shall change its name to remove the word Xxxxxxxx therefrom. Parent
shall
use its reasonable efforts to accomplish this name change prior to the Closing.
XxXxxxxx, as a shareholder of the Parent, will vote in favor of such name
change.
6. NOTICES
All
notices, requests and demands shall be given to or made upon the respective
parties hereto in writing, such address as may be designated by it in a written
notice to the other party. All notices, requests, consents and demands hereunder
shall be effective when duly deposited in the mails (by overnight delivery
by a
nationally-recognized overnight courier service or by United States registered
or certified mail, postage prepaid, return receipt requested) with a copy via
facsimile. Unless the parties designate otherwise, notices should be addressed
as follows:
If
to the
Company or toMcIntosh:
Xxxxxxxx
Uranium Holdings, Inc.
0000
Xxxx
Xxx Xx Xxxxxxx
Xxxxx
X0000
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx XxXxxxxx, Chief Executive Officer
Facsimile:
[insert]
with
a
copy to:
[insert]
If
to the
Parent:
Xxxxxxxx
Uranium corp..
0000
Xxxxxxx Xxx
Xxxxxx
Xxxxx, XX 00000
Attn:
Xxxxx Xxxxxx, President and Chief Executive Officer
Facsimile:
(000) 000-0000
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with
a
copy to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
7. MISCELLANEOUS
(a) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to conflicts of laws principles thereof.
(b) Amendment.
This
Agreement may be amended, modified or terminated only by an instrument in
writing signed by all parties.
(c) No
Assignment.
Neither
this Agreement nor any right or obligation provided for herein may be assigned
by any party without the prior written consent of the other
parties.
(d) Successors.
The
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of, and be enforceable by, the respective successors and assigns of
the
parties hereto.
(e) Counterparts.
The
Agreement may be executed in any number of counterparts, with the same effect
as
if all parties had signed the same document. All such counterparts shall be
deemed an original, shall be construed together and shall constitute one and
the
same instrument. This Agreement may be executed by facsimile
signature.
(f) Construction.
The
language used in this Agreement shall be deemed to be the language chosen by
the
parties to express their mutual intent, and no rule of strict construction
shall
be applied against any party.
(g) Further
Assurances.
(i) Following
the Closing, each of the Company and XxXxxxxx shall, from time to time, execute
and deliver such additional instruments, documents, conveyances or assurances
and take such other actions as shall be necessary, or otherwise reasonably
be
requested by the Parent, to confirm and assure the rights and obligations
provided for in this Agreement and render effective the consummation of the
purchase and sale of Merger Shares contemplated hereby, or otherwise to carry
out the intent and purposes of this Agreement and the other Transaction
Documents.
8
(ii) Following
the Closing, the Parent shall from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances and take such
other
actions as shall be necessary, or otherwise reasonably be requested by the
Company and XxXxxxxx, to confirm and assure the rights and obligations provided
for in this Agreement and render effective the consummation of the purchase
and
sale of Company Shares contemplated hereby, or otherwise to carry out the intent
and purposes of this Agreement and the other Transaction Documents.
(h) Headings.
The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(i) Severability.
Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of
the remaining terms and provisions hereof or the validity or enforceability
of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
parties agree that the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term
or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
[signature
page follows]
9
IN
WITNESS WHEREOF, the parties hereto have caused this Reversal Agreement to
be
duly executed as of the day and year first above written.
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PARENT:
|
COMPANY:
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|
XXXXXXXX
URANIUM CORP.
|
XXXXXXXX
URANIUM HOLDINGS, INC.
|
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By:
|
By:
|
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|
Name: Xxxxx
Xxxxxx
|
Name: Xxxxxx
XxXxxxxx
|
||||
|
Title: Chief
Executive Officer
|
Title: Chief
Executive Officer
|
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XXXXXX
XXXXXXXX
|
[With
respect to Article 4 only]
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|
|
XXXXX
XXXXXX
|
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| [With respect to Article 4 only] | |||||
| XXXXXX XXXXX | |||||
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