SPLIT-OFF AGREEMENT
Exhibit
10.1
This
SPLIT-OFF AGREEMENT,
dated
as of August 15, 2008 (this “Agreement”), is entered into by and among Xx Xxxxxx
Energy, Inc. (formerly known as Xx Xxxxxx Enterprises, Inc.), a Nevada
corporation (“Seller”), De La Xxx Gourmet Chocolates, Inc., Inc., a Nevada
corporation (“Split-Off Subsidiary”), and Xxxxx de la Xxx (the
“Buyer”).
R
E C I T A L S:
WHEREAS, Seller
was formed to create, market and sell gourmet chocolates wholesale and retail
throughout Mexico, as more fully described in the Seller’s registration
statement on Form SB-2 as filed with the Securities and Exchange Commission
(the
“SEC”) on November 7, 2006 (the “Legacy Business”);
WHEREAS,
Seller
discontinued the Legacy Business and decided to redirect its business focus
towards identifying and pursuing opportunities in the energy sector in South
America (the “New Business”);
WHEREAS, Seller
is
the owner of all of the issued and outstanding capital stock of Split-Off
Subsidiary; and Split-Off Subsidiary is a wholly-owned subsidiary of Seller
which, pursuant to this Agreement, will acquire the assets and liabilities
relating to the Legacy Business;
WHEREAS,
Buyer
desires to purchase the Shares (as defined in Section
2.1)
from
Seller, and to assume, as between Seller and Buyer, all responsibility for
any
debts, obligations and liabilities of Seller and Split-Off Subsidiary relating
to the Legacy Business, on the terms and subject to the conditions specified
in
this Agreement; and
WHEREAS,
Seller
desires to sell and transfer the Shares to the Buyer, on the terms and subject
to the conditions specified in this Agreement.
NOW,
THEREFORE,
in
consideration of the premises and the covenants, promises and agreements herein
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, agree as follows:
| I. |
ASSIGNMENT
AND ASSUMPTION OF SELLER’S ASSETS AND LIABILITIES.
|
Subject
to the terms and conditions provided below:
1.1 Assignment
of Assets.
Seller
hereby contributes, assigns, conveys and transfers to Split-Off Subsidiary,
and
Split-Off Subsidiary hereby receives, acquires and accepts, all assets and
properties of Seller relating
to the Legacy Business,
if any,
including but not limited to the following:
|
(a)
|
All
inventories of raw materials, work in process, parts, supplies and
finished products;
|
|
(b)
|
all
of Seller’s rights, title and interests in, to and under all contracts,
agreements, leases, licenses (including software licenses), supply
agreements, consulting agreements, commitments, purchase orders,
customer
orders and work orders, and including all of Seller’s rights thereunder to
use and possess equipment provided by third parties, and all
representations, warranties, covenants and guarantees related to
the
foregoing (provided that to the extent any of the foregoing or any
claim
or right or benefit arising thereunder or resulting therefrom is
not
assignable by its terms, or the assignment thereof shall require
the
consent or approval of another party thereto, this Agreement shall
not
constitute an assignment thereof if an attempted assignment would
be in
violation of the terms thereof or if such consent is not obtained
prior to
the date hereof, and in lieu thereof Seller shall reasonably cooperate
with Split-Off Subsidiary in any reasonable arrangement designed
to
provide Split-Off Subsidiary the benefits thereunder or any claim
or right
arising thereunder);
|
|
(c)
|
all
intellectual property, including but not limited to issued patents,
patent
applications (whether or not patents are issued thereon and whether
modified, withdrawn or resubmitted), unpatented inventions, product
designs, copyrights (whether registered or unregistered), know-how,
technology, trade secrets, technical information, notebooks, drawings,
software, computer coding (both object and source) and all documentation,
manuals and drawings related thereto, trademarks or service marks
and
applications therefor, unregistered trademarks or service marks,
trade
names, logos and icons and all rights to xxx or recover for the
infringement or misappropriation
thereof;
|
|
(d)
|
all
fixed assets, including but not limited to the machinery, equipment,
furniture, vehicles, office equipment and other tangible personal
property
owned or leased by Seller;
|
|
(e)
|
all
customer lists, business records, customer records and files, customer
financial re-cords, and all other files and information related to
customers, all customer proposals, all open service agreements with
customers and all uncompleted customer contracts and agreements;
and
|
|
(f)
|
to
the extent legally assignable, all licenses, permits, certificates,
approvals and authorizations issued by Governmental Entities and
necessary
to own, lease or operate the assets and properties of the Seller
relating
to the Legacy Business and to conduct the Seller’s Legacy Business as it
is presently conducted;
|
but
excluding
in all cases (i) the right, title and assets of Seller relating to the New
Business, (ii) the capital stock of Split-Off Subsidiary, (iii) all cash and
cash equivalents and (iv) all accounts receivable
(all of
the foregoing being referred to herein as the “Assigned Assets”).
-2-
1.2 Assignment
and Assumption of Liabilities. Seller
hereby assigns to Split-Off Subsidiary, and Split-Off Subsidiary hereby assumes
and agrees to pay, honor and discharge all debts, adverse claims, liabilities,
judgments and obligations of Seller relating to the Legacy Business, whether
accrued, contingent or otherwise and whether known or unknown, including those
arising under any law (including the common law) or any rule or regulation
of
any Governmental Entity or imposed by any court or any arbitrator in a binding
arbitration resulting from, arising out of or relating to the assets,
activities, operations, actions or omissions relating to the Lagacy Business
of
the Seller, or pro-ducts manufactured or sold thereby or services provided
thereby, or under contracts, agreements (whether written or oral), leases,
commitments or undertakings thereof, but
excluding
in all cases the obligations of Seller relating to the New
Business
(all of
the foregoing being referred to herein as the “Assigned
Liabilities”).
The
assignment and assumption of Seller’s assets and liabilities provided for in
this Article
I
is
referred to as the “Assignment.”
II.
PURCHASE
AND SALE OF STOCK.
2.1 Purchased
Shares.
Subject
to the terms and conditions provided below, Seller shall sell and transfer
to
Buyer and Buyer shall purchase from Seller, on the Closing Date (as defined
in
Section
3.1),
all of
the issued and outstanding shares of capital stock of Split-Off Subsidiary
(the
“Shares”).
2.2 Purchase
Price.
The
purchase price for the Shares shall be the transfer and delivery by the Buyer
to
Seller of the type and number of shares of common stock and other securities
of
Seller that Buyer owns (the “Purchase Price Securities”), as set forth in
Exhibit A attached hereto, deliverable as provided in Section
3.3.
III.
CLOSING.
3.1 Closing.
The
closing of the transactions contemplated in this Agreement (the “Closing”) shall
take place as soon as practicable following the execution of this Agreement.
The
date on which the Closing occurs shall be referred to herein as the “Closing
Date.”
3.2 Transfer
of Shares.
At the
Closing, Seller shall deliver to Buyer certificates representing the Shares
purchased by Buyer, duly endorsed to Buyer or as directed by Buyer, which
delivery shall vest Buyer with good and marketable title to such Shares, free
and clear of all liens and encumbrances.
3.3 Payment
of Purchase Price.
At the
Closing, Buyer shall deliver to Seller a certificate or certificates
representing that portion of the Buyer’s Purchase Price Securities not
previously delivered to Seller, duly endorsed to Seller, which delivery shall
vest Seller with good and marketable title to the Purchase Price Securities,
free and clear of all liens and encumbrances.
3.4 Transfer
of Records.
On or
before the Closing, Seller shall transfer to Split-Off Subsidiary all existing
corporate books and records in Seller’s possession relating to Split-Off
Subsidiary and its business, including but not limited to all agreements,
litigation files, real estate files, personnel files and filings with
governmental agencies, if any; provided,
however,
when
any such documents relate to both Seller and Split-Off Subsidiary, only copies
of such documents need be furnished. On or before the Closing, Buyer and
Split-Off Subsidiary shall transfer to Seller all existing corporate books
and
records in the possession of Buyer or Split-Off Subsidiary relating to Seller,
including but not limited to all corporate minute books, stock ledgers,
certificates and corporate seals of Seller and all agreements, litigation files,
real property files, personnel files and filings with governmental agencies;
provided,
however,
when
any such documents relate to both Seller and Split-Off Subsidiary or its
business, only copies of such documents need be furnished.
-3-
3.5 Instruments
of Assignment.
At the
Closing, Seller and Split-Off Subsidiary shall deliver to each other such
instruments providing for the Assignment as the other may reasonably request
(the “the Instruments of Assignment”).
IV.
BUYER’S
REPRESENTATIONS AND WARRANTIES.
Buyer
represents and warrants to Seller that:
4.1 Capacity
and Enforceability.
Buyer
has the legal capacity to execute and deliver this Agreement and the documents
to be executed and delivered by Buyer at the Closing pursuant to the
transactions contemplated hereby. This Agreement and all such documents
constitute valid and binding agreements of Buyer, enforceable in accordance
with
their terms.
4.2 Compliance.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby by Buyer will result in the breach of any
term
or provision of, or constitute a default under, or violate any agreement,
indenture, instrument, order, law or regulation to which Buyer is a party or
by
which Buyer is bound.
4.3 Purchase
for Investment.
Buyer
is financially able to bear the economic risks of acquiring the Shares and
the
other transactions contemplated hereby, and has no need for liquidity in his
investment in the Shares. Buyer has such knowledge and experience in financial
and business matters in general, and with respect to businesses of a nature
similar to the business of Split-Off Subsidiary (after giving effect to the
Assignment), so as to be capable of evaluating the merits and risks of, and
making an informed business decision with regard to, the acquisition of the
Shares and the other transactions contemplated hereby. Buyer is acquiring the
Shares solely for his own account and not with a view to or for resale in
connection with any distribution or public offering thereof, within the meaning
of any applicable securities laws and regulations, unless such distribution
or
offering is registered under the Securities Act of 1933, as amended (the
“Securities Act”), or an exemption from such registration is available. Buyer
has (i) received all the information she has deemed necessary to make an
informed decision with respect to the acquisition of the Shares and the other
transactions contemplated hereby; (ii) had an opportunity to make such
investigation as she has desired pertaining to Split-Off Subsidiary (after
giving effect to the Assignment) and the acquisition of an interest therein
and
the other transactions contemplated hereby, and to verify the information which
is, and has been, made available to her; and (iii) had the opportunity to
ask questions of Seller concerning Split-Off Subsidiary (after giving effect
to
the Assignment). Buyer acknowledges that Buyer was a director and officer of
Seller and,
as
such, has actual knowledge of the business, operations and financial affairs
of
Split-Off Subsidiary (after giving effect to the Assignment). Buyer has received
no public solicitation or advertisement with respect to the offer or sale of
the
Shares. Buyer realizes that the Shares are “restricted securities” as that term
is defined in Rule 144 promulgated by the SEC under the Securities Act, the
resale of the Shares is restricted by federal and state securities laws and,
accordingly, the Shares must be held indefinitely unless their resale is
subsequently registered under the Securities Act or an exemption from such
registration is available for their resale. Buyer understands that any resale
of
the Shares by her must be registered under the Securities Act (and any
applicable state securities law) or be effected in circumstances that, in the
opinion of counsel for Split-Off Subsidiary at the time, create an exemption
or
otherwise do not require registration under the Securities Act (or applicable
state securities laws). Buyer acknowledges and consents that certificates now
or
hereafter issued for the Shares will bear a legend substantially as
follows:
-4-
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH
REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE
SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT
AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER
OF
THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO
THE
AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR
SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT
VIOLATE THE SECURITIES LAWS.
Buyer
understands that the Shares are being sold to her pursuant to the exemption
from
registration contained in Section 4(1) of the Securities Act and that the Seller
is relying upon the representations made herein as one of the bases for claiming
the Section 4(1) exemption.
4.4 Liabilities.
Following the Closing, Seller will have no liability for any debts, liabilities
or obligations of Split-Off Subsidiary or its business or activities, and there
are no outstanding guaranties, performance or payment bonds, letters of credit
or other contingent contractual obligations that have been undertaken by Seller
directly or indirectly in relation to Split-Off Subsidiary or its business
and
that may survive the Closing.
4.5 Title
to Purchase Price Securities.
Buyer
is the sole record and beneficial owner of her Purchase Price Securities. At
Closing, Buyer will have good and marketable title to her Purchase Price
Securities, which Purchase Price Securities are, and at the Closing will be,
free and clear of all options, warrants, pledges, claims, liens and
encumbrances, and any restrictions or limitations prohibiting or restricting
transfer to Seller, except for restrictions on transfer as contemplated by
applicable securities laws.
-5-
V.
SELLER’S
AND SUBSIDIARY’S REPRESENTATIONS AND WARRANTIES.
Seller
and Split-Off Subsidiary, jointly and severally, represent and warrant to Buyer
that:
5.1 Organization
and Good Standing.
Each of
the Seller and Split-Off Subsidiary is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Nevada.
5.2 Authority
and Enforceability.
The
execution and delivery of this Agreement and the documents to be executed and
delivered at the Closing pursuant to the transactions contemplated hereby,
and
performance in accordance with the terms hereof and thereof, have been duly
authorized by Seller and all such documents constitute valid and binding
agreements of Seller enforceable in accordance with their terms.
5.3 Title
to Shares.
Seller
is the sole record and beneficial owner of the Shares. At Closing, Seller will
have good and marketable title to the Shares, which Shares are, and at the
Closing will be, free and clear of all options, warrants, pledges, claims,
liens
and encumbrances, and any restrictions or limitations prohibiting or restricting
transfer to Buyer, except for restrictions on transfer as contemplated by
Section
4.3
above.
The Shares constitute all of the issued and outstanding shares of capital stock
of Split-Off Subsidiary.
5.4 WARN
Act.
Split-Off Subsidiary does not have a sufficient number of employees to make
it
subject to the Worker Adjustment and Retraining Notification Act.
VI.
OBLIGATIONS
OF BUYER PENDING CLOSING.
Buyer
covenants and agrees that between the date hereof and the Closing:
6.1 Not
Impair Performance.
Buyer
shall not take any intentional action that would cause the conditions upon
the
obligations of the parties hereto to effect the transactions contemplated hereby
not to be fulfilled, including, without limitation, taking or causing to be
taken any action that would cause the representations and warranties made by
any
party herein not to be true, correct and accurate as of the Closing, or in
any
way impairing the ability of Seller to satisfy its obligations as provided
in
Article
VII.
6.2 Assist
Performance.
Buyer
shall exercise its reasonable best efforts to cause to be fulfilled those
conditions precedent to Seller’s obligations to consummate the transactions
contemplated hereby which are dependent upon actions of Buyer and to make and/or
obtain any necessary filings and consents in order to consummate the sale
transaction contemplated by this Agreement.
VII. OBLIGATIONS
OF SELLER PENDING CLOSING.
Seller
covenants and agrees that between the date hereof and the Closing:
7.1 Business
as Usual.
Split-Off Subsidiary shall operate and Seller shall cause Split-Off Subsidiary
to operate in accordance with past practices and shall use best efforts to
preserve its goodwill and the goodwill of its employees, customers and others
having business dealings with Split-Off Subsidiary, if any. Without limiting
the
generality of the foregoing, from the date of this Agreement until the Closing
Date, Split-Off Subsidiary shall, as applicable, (a) make all normal and
customary repairs to its equipment, assets and facilities, (b) keep in
force all insurance, (c) preserve in full force and effect all material
franchises, licenses, contracts and real property interests and comply in all
material respects with all laws and regulations, (d) collect all accounts
receivable and pay all trade creditors in the ordinary course of business at
intervals historically experienced, and (e) preserve and maintain Split-Off
Subsidiary’s assets in their current operating condition and repair, ordinary
wear and tear excepted. From the date of this Agreement until the Closing Date,
Split-Off Subsidiary shall not (i) amend, terminate or surrender any
material franchise, license, contract or real property interest, or
(ii) sell or dispose of any of its assets except in the ordinary course of
business. Neither Split-Off Subsidiary nor Buyer shall take or omit to take
any
action that results in Seller incurring any liability or obligation prior to
or
in connection with the Closing.
-6-
7.2 Not
Impair Performance.
Seller
shall not take any intentional action that would cause the conditions upon
the
obligations of the parties hereto to effect the transactions contemplated hereby
not to be fulfilled, including, without limitation, taking or causing to be
taken any action which would cause the representations and warranties made
by
any party herein not to be materially true, correct and accurate as of the
Closing, or in any way impairing the ability of Buyer to satisfy her obligations
as provided in Article
VI.
7.3 Assist
Performance.
Seller
shall exercise its reasonable best efforts to cause to be fulfilled those
conditions precedent to Buyer’s obligations to consummate the transactions
contemplated hereby which are dependent upon the actions of Seller and to work
with Buyer to make and/or obtain any necessary filings and consents. Seller
shall cause Split-Off Subsidiary to comply with its obligations under this
Agreement.
VII. SELLER’S
AND SUBSIDIARY’S CONDITIONS PRECEDENT TO CLOSING.
The
obligations of Seller and Split-Off Subsidiary to close the transactions
contemplated by this Agreement are subject to the satisfaction at or prior
to
the Closing of each of the following conditions precedent (any or all of which
may be waived by Seller in writing):
8.1 Representations
and Warranties; Performance.
All
representations and warranties of Buyer contained in this Agreement shall have
been true and correct, in all material respects, when made and shall be true
and
correct, in all material respects, at and as of the Closing, with the same
effect as though such representations and warranties were made at and as of
the
Closing. Buyer shall have performed and complied with all covenants and
agreements and satisfied all conditions, in all material respects, required
by
this Agreement to be performed or complied with or satisfied by Buyer at or
prior to the Closing.
8.2 Additional
Documents.
Buyer
shall deliver or cause to be delivered such additional documents as may be
necessary in connection with the consummation of the transactions contemplated
by this Agreement and the performance of their obligations
hereunder.
8.3 Release
by Split-Off Subsidiary.
At the
Closing, Split-Off Subsidiary shall execute and deliver to Seller a general
release which in substance and effect releases Seller from any and all
liabilities and obligations that Seller may owe to Split-Off Subsidiary in
any
capacity, and from any and all claims that Split-Off Subsidiary may have against
Seller or its managers, members, officers, directors, stockholders, employees
and agents (other than those arising pursuant to this Agreement or any document
delivered in connection with this Agreement).
-7-
IX. BUYER’S
CONDITIONS PRECEDENT TO CLOSING.
The
obligation of Buyer to close the transactions contemplated by this Agreement
is
subject to the satisfaction at or prior to the Closing of each of the following
conditions precedent (any and all of which may be waived by Buyer in
writing):
9.1 Representations
and Warranties; Performance.
All
representations and warranties of Seller and Split-Off Subsidiary contained
in
this Agreement shall have been true and correct, in all material respects,
when
made and shall be true and correct, in all material respects, at and as of
the
Closing with the same effect as though such representations and warranties
were
made at and as of the Closing. Seller and Split-Off Subsidiary shall have
performed and complied with all covenants and agreements and satisfied all
conditions, in all material respects, required by this Agreement to be performed
or complied with or satisfied by them at or prior to the Closing.
X. OTHER
AGREEMENTS.
10.1 Expenses.
Each
party hereto shall bear its expenses separately incurred in connection with
this
Agreement and with the performance of its obligations hereunder.
10.2 Confidentiality.
The
parties hereto shall not make any public announcements concerning this
transaction other than in accordance with mutual agreement reached prior to
any
such announcement(s) and other than as may be required by applicable law or
judicial process. If for any reason the transactions contemplated hereby are
not
consummated, then Buyer shall return any information received by Buyer from
Seller or Split-Off Subsidiary, and Buyer shall cause all confidential
information obtained by Buyer concerning Split-Off Subsidiary and its business
to be treated as such.
10.3 Brokers’
Fees.
In
connection with the transaction specifically contemplated by this Agreement,
no
party to this Agreement has employed the services of a broker and each agrees
to
indemnify the other against all claims of any third parties for fees and
commissions of any brokers claiming a fee or commission related to the
transactions contemplated hereby.
10.4 Access
to Information Post-Closing; Cooperation.
(a) Following
the Closing, Buyer and Split-Off Subsidiary shall afford to Seller and its
authorized accountants, counsel and other designated representatives, reasonable
access (and including using reasonable efforts to give access to persons or
firms possessing information) and duplicating rights during normal business
hours to allow records, books, contracts, instruments, computer data and other
data and information (collectively, “Information”) within the possession or
control of Buyer or Split-Off Subsidiary insofar as such access is reasonably
required by Seller. Information may be requested under this Section
10.4(a)
for,
without limitation, audit, accounting, claims, litigation and tax purposes,
as
well as for purposes of fulfilling disclosure and reporting obligations and
performing this Agreement and the transactions contemplated hereby. No files,
books or records of Split-Off Subsidiary existing at the Closing Date shall
be
destroyed by Buyer or Split-Off Subsidiary after Closing but prior to the
expiration of any period during which such files, books or records are required
to be maintained and preserved by applicable law without giving the Seller
at
least 30 days’ prior written notice, during which xxxx Xxxxxx shall have the
right to examine and to remove any such files, books and records prior to their
destruction.
-8-
(b) Following
the Closing, Seller shall afford to Split-Off Subsidiary and its authorized
accountants, counsel and other designated representatives reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) duplicating rights during normal business hours to
Information within Seller’s possession or control relating to the business of
Split-Off Subsidiary. Information may be requested under this Section
10.4(b)
for,
without limitation, audit, accounting, claims, litigation and tax purposes
as
well as for purposes of fulfilling disclosure and reporting obligations and
for
performing this Agreement and the transactions contemplated hereby. No files,
books or records of Split-Off Subsidiary existing at the Closing Date shall
be
destroyed by Seller after Closing but prior to the expiration of any period
during which such files, books or records are required to be maintained and
preserved by applicable law without giving the Buyer at least 30 days prior
written notice, during which time Buyer shall have the right to examine and
to
remove any such files, books and records prior to their
destruction.
(c) At
all
times following the Closing, Seller, Buyer and Split-Off Subsidiary shall use
their reasonable efforts to make available to the other party on written
request, the current and former officers, directors, employees and agents of
Seller or Split-Off Subsidiary for any of the purposes set forth in Section
10.4(a) or (b)
above or
as witnesses to the extent that such persons may reasonably be required in
connection with any legal, administrative or other proceedings in which Seller
or Split-Off Subsidiary may from time to be involved.
(d) The
party
to whom any Information or witnesses are provided under this Section
10.4
shall
reimburse the provider thereof for all out-of-pocket expenses actually and
reasonably incurred in providing such Information or witnesses.
(e) Seller,
Buyer, Split-Off Subsidiary and their respective employees and agents shall
each
hold in strict confidence all Information concerning the other party in their
possession or furnished by the other or the other’s representative pursuant to
this Agreement with the same degree of care as such party utilizes as to such
party’s own confidential information (except to the extent that such Information
is (i) in the public domain through no fault of such party or
(ii) later lawfully acquired from any other source by such party), and each
party shall not release or disclose such Information to any other person, except
such party’s auditors, attorneys, financial advisors, bankers, other consultants
and advisors or persons with whom such party has a valid obligation to disclose
such Information, unless compelled to disclose such Information by judicial
or
administrative process or, as advised by its counsel, by other requirements
of
law.
(f) Seller,
Buyer and Split-Off Subsidiary shall each use their best efforts to forward
promptly to the other party all notices, claims, correspondence and other
materials which are received and determined to pertain to the other
party.
-9-
10.5 Guarantees,
Surety Bonds and Letter of Credit Obligations.
In the
event that Seller is obligated for any debts, obligations or liabilities of
Split-Off Subsidiary by virtue of any outstanding guarantee, performance or
surety bond or letter of credit provided or arranged by Seller on or prior
to
the Closing Date, Buyer and Split-Off Subsidiary shall use their best efforts
to
cause to be issued replacements of such bonds, letters of credit and guarantees
and to obtain any amendments, novations, releases and approvals necessary to
release and discharge fully Seller from any liability thereunder following
the
Closing. Buyer and Split-Off Subsidiary, jointly and severally, shall be
responsible for, and shall indemnify, hold harmless and defend Seller from
and
against, any costs or losses incurred by Seller arising from such bonds, letters
of credits and guarantees and any liabilities arising therefrom and shall
reimburse Seller for any payments that Seller may be required to pay pursuant
to
enforcement of its obligations relating to such bonds, letters of credit and
guarantees.
10.6 Filings
and Consents.
Buyer,
at its risk, shall determine what, if any, filings and consents must be made
and/or obtained prior to Closing to consummate the purchase and sale of the
Shares. Buyer shall indemnify the Seller Indemnified Parties (as defined in
Section
12.1
below)
against any Losses (as defined in Section
12.1
below)
incurred by such Seller Indemnified Parties by virtue of the failure to make
and/or obtain any such filings or consents. Recognizing that the failure to
make
and/or obtain any filings or consents may cause Seller to incur Losses or
otherwise adversely affect Seller, Buyer and Split-Off Subsidiary confirm that
the provisions of this Section
10.6
will not
limit Seller’s right to treat such failure as the failure of a condition
precedent to Seller’s obligation to close pursuant to Article
VIII
above.
10.7 Insurance.
Buyer
acknowledges that on the Closing Date, effective as of the Closing, all
insurance coverage and bonds provided by Seller for Split-Off Subsidiary, and
all certificates of insurance evidencing that Split-Off Subsidiary maintains
any
required insurance by virtue of insurance provided by Seller, will terminate
with respect to any insured damages resulting from matters occurring subsequent
to Closing.
10.8 Agreements
Regarding Taxes.
(a) Tax
Sharing Agreements.
Any tax
sharing agreement between Seller and Split-Off Subsidiary is terminated as
of
the Closing Date and will have no further effect for any taxable year (whether
the current year, a future year or a past year).
(b) Returns
for Periods Through the Closing Date.
Seller
will include the income and loss of Split-Off Subsidiary (including any deferred
income triggered into income by Reg. §1.1502-13 and any excess loss accounts
taken into income under Reg. §1.1502-19) on Seller’s consolidated federal income
tax returns for all periods through the Closing Date and pay any federal income
taxes attributable to such income. Seller and Split-Off Subsidiary agree to
allocate income, gain, loss, deductions and credits between the period up to
Closing (the “Pre-Closing Period”) and the period after Closing (the
“Post-Closing Period”) based on a closing of the books of Split-Off Subsidiary,
and both Seller and Split-Off Subsidiary agree not to make an election under
Reg. §1.1502-76(b)(2)(ii) to ratably allocate the year’s items of income, gain,
loss, deduction and credit. Seller, Split-Off Subsidiary and Buyer agree to
report all transactions not in the ordinary course of business occurring on
the
Closing Date after Buyer’s purchase of the Shares on Split-Off Subsidiary’s tax
returns to the extent permitted by Reg. §1.1502-76(b)(1)(ii)(B). Buyer agrees to
indemnify Seller for any additional tax owed by Seller (including tax owned
by
Seller due to this indemnification payment) resulting from any transaction
engaged in by Split-Off Subsidiary during the Pre-Closing Period or on the
Closing Date after Buyer’s purchase of the Shares. Split-Off Subsidiary will
furnish tax information to Seller for inclusion in Seller’s consolidated federal
income tax return for the period which includes the Closing Date in accordance
with Split-Off Subsidiary’s past custom and practice.
-10-
(c) Audits.
Seller
will allow Split-Off Subsidiary and its counsel to participate at Split-Off
Subsidiary’s expense in any audits of Seller’s consolidated federal income tax
returns to the extent that such audit raises issues that relate to and increase
the tax liability of Split-Off Subsidiary. Seller shall have the absolute right,
in its sole discretion, to engage professionals and direct the representation
of
Seller in connection with any such audit and the resolution thereof, without
receiving the consent of Buyer or Split-Off Subsidiary or any other party acting
on behalf of Buyer or Split-Off Subsidiary, provided that Seller will not settle
any such audit in a manner which would materially adversely affect Split-Off
Subsidiary after the Closing Date unless such settlement would be reasonable
in
the case of a person that owned Split-Off Subsidiary both before and after
the
Closing Date. In the event that after Closing any tax authority informs Buyer
or
Split-Off Subsidiary of any notice of proposed audit, claim, assessment or
other
dispute concerning an amount of taxes which pertain to the Seller, or to
Split-Off Subsidiary during the period prior to Closing, Buyer or Split-Off
Subsidiary must promptly notify the Seller of the same within 15 calendar days
of the date of the notice from the tax authority. In the event Buyer or
Split-Off Subsidiary do not notify the Seller within such 15 day period, Buyer
and Split-Off Subsidiary, jointly and severally, will indemnify the Seller
for
any incremental interest, penalty or other assessments resulting from the delay
in giving notice. To the extent of any conflict or inconsistency, the provisions
of this Section 10.8
shall
control over the provisions of Section 12.2
below.
(d) Cooperation
on Tax Matters.
Buyer,
Seller and Split-Off Subsidiary shall cooperate fully, as and to the extent
reasonably requested by any party, in connection with the filing of tax returns
pursuant to this Section and any audit, litigation or other proceeding with
respect to taxes. Such cooperation shall include the retention and (upon the
other party’s request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Split-Off
Subsidiary shall (i) retain all books and records with respect to tax
matters pertinent to Split-Off Subsidiary relating to any taxable period
beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Seller, any extensions thereof)
of
the respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (ii) give Seller reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the Seller so requests, Buyer agrees to cause Split-Off
Subsidiary to allow Seller to take possession of such books and
records.
-11-
10.9 ERISA.
Effective as of the Closing Date, Split-Off Subsidiary shall terminate its
participation in, and withdraw from, all employee benefit plans sponsored by
Seller, and Seller and Buyer shall cooperate fully in such termination and
withdrawal. Without limitation, Split-Off Subsidiary shall be solely responsible
for (i) all liabilities under those employee benefit plans notwithstanding
any status as an employee benefit plan sponsored by Seller, and (ii) all
liabilities for the payment of vacation pay, severance benefits, and similar
obligations, including, without limitation, amounts which are accrued but unpaid
as of the Closing Date with respect thereto. Buyer and Split-Off Subsidiary
acknowledge that Split-Off Subsidiary is solely responsible for providing
continuation health coverage, as required under the Consolidated Omnibus
Reconciliation Act of 1985, as amended (“COBRA”), to each person, if any,
participating in an employee benefit plan subject to COBRA with respect to
such
employee benefit plan as of the Closing Date, including, without limitation,
any
person whose employment with Split-Off Subsidiary is terminated after the
Closing Date.
XI.
TERMINATION.
This
Agreement may be terminated at, or at any time prior to, the Closing by mutual
written consent of Seller and Buyer.
If
this
Agreement is terminated as provided herein, it shall become wholly void and
of
no further force and effect and there shall be no further liability or
obligation on the part of any party except to pay such expenses as are required
of such party.
XII.
INDEMNIFICATION.
12.1 Indemnification
by Buyer.
Buyer
covenants and agrees to indemnify, defend, protect and hold harmless Seller,
and
its respective officers, directors, employees, stockholders, agents,
representatives and Affiliates (collectively, the “Seller Indemnified Parties”)
at all times from and after the date of this Agreement from and against all
losses, liabilities, damages, claims, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys’ fees and expenses of investigation),
whether or not involving a third party claim and regardless of any negligence
of
any Seller Indemnified Party (collectively, “Losses”), incurred by any Seller
Indemnified Party as a result of or arising from (i) any breach of the
representations and warranties of Buyer set forth herein or in certificates
delivered in connection herewith, (ii) any breach or nonfulfillment of any
covenant or agreement (including any other agreement of Buyer to indemnify
set
forth in this Agreement) on the part of Buyer under this Agreement,
(iii) any Assigned Asset or Assigned Liability or any other debt, liability
or obligation of Split-Off Subsidiary, (iv) the conduct and operations,
whether before or after Closing, of (A) the business of Seller pertaining to
the
Assigned Assets and Assigned Liabilities or (B) the business of Split-Off
Subsidiary, (v) claims asserted, whether before or after Closing, (A)
against Split-Off Subsidiary or (B) pertaining to the Assigned Assets and
Assigned Liabilities, or (vi) any federal or state income tax payable by
Seller and attributable to the transactions contemplated by this Agreement.
The
obligations of Buyer under this Section, as between Buyer and the Seller
Indemnified Parties, are joint and several.
-12-
12.2 Third
Party Claims.
(a) Defense.
If any
claim or liability (a “Third-Party Claim”) should be asserted against any of the
Seller Indemnified Parties (the “Indemnitee”) by a third party after the Closing
for which Buyer has an indemnification obligation under the terms of
Section
12.1,
then
the Indemnitee shall notify Buyer (the “Indemnitor”) within 20 days after the
Third-Party Claim is asserted by a third party (said notification being referred
to as a “Claim Notice”) and give the Indemnitor a reasonable opportunity to take
part in any examination of the books and records of the Indemnitee relating
to
such Third-Party Claim and to assume the defense of such Third-Party Claim
and
in connection therewith and to conduct any proceedings or negotiations relating
thereto and necessary or appropriate to defend the Indemnitee and/or settle
the
Third-Party Claim. The expenses (including reasonable attorneys’ fees) of all
negotiations, proceedings, contests, lawsuits or settlements with respect to
any
Third-Party Claim shall be borne by the Indemnitor. If the Indemnitor agrees
to
assume the defense of any Third-Party Claim in writing within 20 days after
the
Claim Notice of such Third-Party Claim has been delivered, through counsel
reasonably satisfactory to Indemnitee, then the Indemnitor shall be entitled
to
control the conduct of such defense, and any decision to settle such Third-Party
Claim, and shall be responsible for any expenses of the Indemnitee in connection
with the defense of such Third-Party Claim so long as the Indemnitor continues
such defense until the final resolution of such Third-Party Claim. The
Indemnitor shall be responsible for paying all settlements made or judgments
entered with respect to any Third-Party Claim the defense of which has been
assumed by the Indemnitors. Except as provided on subsection (b) below, both
the
Indemnitor and the Indemnitee must approve any settlement of a Third-Party
Claim. A failure by the Indemnitee to timely give the Claim Notice shall not
excuse Indemnitor from any indemnification liability except only to the extent
that the Indemnitor is materially and adversely prejudiced by such
failure.
(b) Failure
to Defend.
If the
Indemnitor shall not agree to assume the defense of any Third-Party Claim in
writing within 20 days after the Claim Notice of such Third-Party Claim has
been
delivered, or shall fail to continue such defense until the final resolution
of
such Third-Party Claim, then the Indemnitee may defend against such Third-Party
Claim in such manner as it may deem appropriate and the Indemnitee may settle
such Third-Party Claim, in its sole discretion, on such terms as it may deem
appropriate. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all settlement payments and expenses, legal and otherwise, incurred
by
the Indemnitee in connection with the defense or settlement of such Third-Party
Claim. If no settlement of such Third-Party Claim is made, then the Indemnitor
shall satisfy any judgment rendered with respect to such Third-Party Claim
before the Indemnitee is required to do so, and pay all expenses, legal or
otherwise, incurred by the Indemnitee in the defense against such Third-Party
Claim.
12.3 Non-Third-Party
Claims.
Upon
discovery of any claim for which Buyer has an indemnification obligation under
the terms of Section
12.1
which
does not involve a claim by a third party against the Indemnitee, the Indemnitee
shall give prompt notice to Buyer of such claim and, in any case, shall give
Buyer such notice within 30 days of such discovery. A failure by Indemnitee
to
timely give the foregoing notice to Buyer shall not excuse Buyer from any
indemnification liability except to the extent that Buyer is materially and
adversely prejudiced by such failure.
-13-
12.4 Survival.
Except
as otherwise provided in this Section
12.4,
all
representations and warranties made by Buyer, Split-Off Subsidiary and Seller
in
connection with this Agreement shall survive the Closing. Anything in this
Agreement to the contrary notwithstanding, the liability of all Indemnitors
under this Article
XII
shall
terminate on the third (3rd)
anniversary of the Closing Date, except with respect to (a) liability for
any item as to which, prior to the third (3rd)
anniversary of the Closing Date, any Indemnitee shall have asserted a Claim
in
writing, which Claim shall identify its basis with reasonable specificity,
in
which case the liability for such Claim shall continue until it shall have
been
finally settled, decided or adjudicated, (b) liability of any party for
Losses for which such party has an indemnification obligation, incurred as
a
result of such party’s breach of any covenant or agreement to be performed by
such party after the Closing, (c) liability of a Buyer for Losses incurred
by a Seller Indemnified Party due to breaches of its representations and
warranties in Article IV
of this
Agreement, and (d) liability of a Buyer for Losses arising out of
Third-Party Claims for which Buyer have an indemnification obligation, which
liability shall survive until the statute of limitation applicable to any third
party’s right to assert a Third-Party Claim bars assertion of such
claim.
XIII. MISCELLANEOUS.
13.1 Notices.
All
notices and communications required or permitted hereunder shall be in writing
and deemed given when received by means of the United States mail, addressed
to
the party to be notified, postage prepaid and registered or certified with
return receipt requested, or personal delivery, or overnight courier, as
follows:
| (a) |
If
to Seller, addressed to:
|
Xx
Xxxxxx
Energy, Inc.
0000
0xx
Xxxxxx, Xxxxx
0
Xxxxxxxx,
XX. 00000
Attn:
Xxxxxx Xxxxxxxxx
With
a
copy to (which shall not constitute notice hereunder):
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
| (b) |
If
to Buyer or Split-Off Subsidiary, addressed
to:
|
De
La Xxx
Gourmet Chocolates, Inc.
0000
Xx
Xxxxx Xxxx. #000
Xxx
Xxxxx, XX 00000
Phone:
(000) 000-0000
Attention:
Xxxxx de la Xxx
or
to
such other address as any party hereto shall specify pursuant to this
Section 13.1
from
time to time.
-14-
13.2 Exercise
of Rights and Remedies.
Except
as otherwise provided herein, no delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in
any
such breach or default, or of any similar breach or default occurring later;
nor
shall any waiver of any single breach or default be deemed a waiver of any
other
breach or default occurring before or after that waiver.
13.3 Time.
Time is
of the essence with respect to this Agreement.
13.4 Reformation
and Severability.
In case
any provision of this Agreement shall be invalid, illegal or unenforceable,
it
shall, to the extent possible, be modified in such manner as to be valid, legal
and enforceable but so as to most nearly retain the intent of the parties,
and
if such modification is not possible, such provision shall be severed from
this
Agreement, and in either case the validity, legality and enforceability of
the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
13.5 Further
Acts and Assurances.
From
and after the Closing, Seller, Buyer and Split-Off Subsidiary agree that each
will act in a manner supporting compliance, including compliance by its
Affiliates, with all of its obligations under this Agreement and, from time
to
time, shall, at the request of another party hereto, and without further
consideration, cause the execution and delivery of such other instruments of
conveyance, transfer, assignment or assumption and take such other action or
execute such other documents as such party may reasonably request in order
more
effectively to convey, transfer to and vest in Buyer, and to put Split-Off
Subsidiary in possession of, all Assigned Assets and Assigned Liabilities,
and
to convey, transfer to and vest in Seller and Buyer, and to them in possession
of, the Purchase Price Securities and the Shares (respectively), and, in the
case of any contracts and rights which cannot be effectively transferred without
the consent or approval of other Persons that is unob-tainable, to use its
best
reasonable efforts to ensure that Split-Off Subsidiary receives the benefits
thereof to the maximum extent permissible in accordance with applicable law
or
other applicable restrictions, and shall perform such other acts which may
be
reasonably necessary to effectuate the purposes of this Agreement.
13.6 Entire
Agreement; Amendments.
This
Agreement contains the entire understanding of the parties relating to the
subject matter contained herein. This Agreement cannot be amended or changed
except through a written instrument signed by all of the parties hereto. No
provisions of this Agreement or any rights hereunder may be waived by any party
without the prior written consent of the other parties.
13.7 Assignment.
No
party may assign his, her or its rights or obligations hereunder, in whole
or in
part, without the prior written consent of the other parties.
-15-
13.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without giving effect to principles of conflicts or choice
of
laws thereof.
13.9 Counterparts.
This
Agreement may be executed in one or more counterparts, with the same effect
as
if all parties had signed the same document. Each such counterpart shall be
an
original, but all such counterparts taken together shall constitute a single
agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page was an original
thereof.
13.10 Section
Headings and Gender.
The
Section headings used herein are inserted for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement. All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter, and the singular shall
include the plural, and vice
versa,
whenever and as often as may be appropriate.
13.11 Specific
Performance; Remedies.
Each of
Seller, Buyer and Split-Off Subsidiary acknowledges and agrees that Seller
would
be damaged irreparably if any provision of this Agreement is not performed
in
accordance with its specific terms or is otherwise breached. Accordingly, each
of Buyer and Split-Off Subsidiary agrees that Seller will be entitled to seek
an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and its terms and
provisions in any action instituted in any court of the United States or any
state thereof having jurisdiction over the parties and the matter, subject
to
Section
8,
in
addition to any other remedy to which they may be entitled, at law or in equity.
Except as expressly provided herein, the rights, obligations and remedies
created by this Agreement are cumulative and are in addition to any other
rights, obligations or remedies otherwise available at law or in equity, and
nothing herein will be considered an election of remedies.
13.12 Submission
to Jurisdiction; Process Agent; No Jury Trial.
(a) Each
party to the Agreement hereby submits to the jurisdiction of any state or
federal court sitting in the State of New York in any action arising out of
or
relating to this Agreement and agrees that all claims in respect of the action
may be heard and determined in any such court. Each party to the Agreement
also
agrees not to bring any action arising out of or relating to this Agreement
in
any other court. Each party to the Agreement agrees that a final judgment in
any
action so brought will be conclusive and may be enforced by action on the
judgment or in any other manner provided at law or in equity. Each party to
the
Agreement waives any defense of inconvenient forum to the maintenance of any
action so brought and waives any bond, surety or other security that might
be
required of any other party with respect thereto.
-16-
(b) EACH
PARTY TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO JURY TRIAL OF
ANY
DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY DEALINGS AMONG THEM
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver
is
intended to be all encompassing of any and all actions that may be filed in
any
court and that relate to the subject matter of the transactions, including
contract claims, tort claims, breach of duty claims and all other common law
and
statutory claims. Each party to the Agreement hereby acknowledges that this
waiver is a material inducement to enter into a business relationship and that
they will continue to rely on the waiver in their related future dealings.
Each
party to the Agreement further represents and warrants that it has reviewed
this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY
NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO
ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of commencement
of
any action, this Agreement may be filed as a written consent to trial by a
court.
13.13 Construction.
The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. If an ambiguity or question of intent or interpretation arises,
this
Agreement will be construed as if drafted jointly by the parties hereto and
no
presumption or burden of proof will arise favoring or disfavoring any party
because of the authorship of any provision of this Agreement. Any reference
to
any federal, state, local or foreign law will be deemed also to refer to law
as
amended and all rules and regulations promulgated thereunder, unless the context
requires otherwise. The words “include,” “includes,” and “including” will be
deemed to be followed by “without limitation.” The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The parties hereto intend that each representation, warranty and
covenant contained herein will have independent significance. If any party
hereto has breached any representation, warranty or covenant contained herein
in
any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which that party has not breached will not detract from or
mitigate the fact that such party is in breach of the first representation,
warranty or covenant.
[Signature
page follows this page.]
-17-
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Split-Off Agreement as of the day and
year first above written.
|
XX
XXXXXX ENERGY, INC.
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
|
|
Name:
|
Xxxxxx
Xxxxxxxxx
|
|
|
Title:
|
President
|
|
|
DE
LA XXX GOURMET CHOCOLATES, INC.
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
|
|
Name:
|
Xxxxxx
Xxxxxxxxx
|
|
|
Title
|
President
|
|
|
BUYER
|
||
|
/s/Xxxxx
de la Xxx
|
||
|
Xxxxx
de la Xxx
|
||
-18-
EXHIBIT
A
|
Buyer
|
Purchase
Price Security
|
Number
of Shares
|
|
Xxxxx
de le Xxx
|
Common
Stock, $0.001 par
|
9,000,0001
|
|
value
per share, of Xx Xxxxxx
|
||
|
Energy,
Inc. (formerly known
|
||
|
as
Xx Xxxxxx Enterprises, Inc.)
|
||
|
Xxxxx
de le Xxx
|
Common
Stock, $0.001 par
|
2,250,000
|
|
value
per share, of Xx Xxxxxx
|
||
|
Energy,
Inc.
|
1
These
shares were surrendered by Ms. de la Xxx to us on February 26,
2008.
-19-
