SPLIT-OFF AGREEMENT
This
SPLIT-OFF AGREEMENT,
dated
as of this 11th day
of July, 2007 (this “Agreement”), is entered into by and among Xxxxxxxx Uranium
Corp., formerly known as Arbutus Resources, Inc., a Nevada corporation
(“Seller”), Xxxxx Xxx (“Law”), Xxxx Xxxxx (“Xxxxx”) (Law and Xxxxx sometimes
hereinafter referred to individually as a “Buyer” and collectively as the
“Buyers”), Arbutus Leaseco, Inc., a Nevada corporation (“Leaseco”), and Xxxxxxxx
Uranium Holdings, Inc., an Arizona corporation (“Xxxxxxxx”).
R
E C I T A L S:
WHEREAS, Seller
is
the owner of all of the issued and outstanding capital stock of Leaseco. Leaseco
is a newly-formed, wholly-owned subsidiary of Seller which was organized to
acquire, and has so acquired, the business assets and liabilities previously
held by Seller. Seller has no other businesses or operations;
WHEREAS,
contemporaneously with the execution of this Agreement, Seller, Xxxxxxxx and
a
newly-formed wholly-owned Arizona subsidiary of Seller, Xxxxxxxx Acquisition
Corp. (“Acquisition Corp.”), will enter into an Agreement and Plan of Merger and
Reorganization (the “Merger Agreement”) pursuant to which Acquisition Corp. will
merge with and into Xxxxxxxx with Xxxxxxxx remaining as the surviving entity
(the “Merger”). The equity holders of Xxxxxxxx will receive securities of Seller
in exchange for their equity interests in Xxxxxxxx;
WHEREAS,
the
execution and delivery of this Agreement is required by Xxxxxxxx as a condition
to its execution of the Merger Agreement. The consummation of the purchase
and
sale transaction contemplated by this Agreement is also a condition to the
completion of the Merger pursuant to the Merger Agreement. Seller has
represented to Xxxxxxxx in the Merger Agreement that the purchase and sale
transaction contemplated by this Agreement will be consummated immediately
following with the closing of the Merger, and Xxxxxxxx relied on such
representation in entering into the Merger Agreement;
WHEREAS,
Buyers
desire to purchase the Shares (as defined in Section
1.1)
from
Seller, and to assume, as between Seller and Buyers, all responsibilities for
any debts, obligations and liabilities of Leaseco, on the terms and subject
to
the conditions specified in this Agreement; and
WHEREAS,
Seller
desires to sell and transfer the Shares to the Buyers, 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. PURCHASE
AND SALE OF STOCK.
1.1 Purchased
Shares.
Subject
to the terms and conditions provided below, Seller shall sell and transfer
to
Buyers and Buyers shall purchase from Seller, on the Closing Date (as defined
in
Section
1.3),
all of
the issued and outstanding shares of capital stock of Leaseco (the
“Shares”).
1.2 Purchase
Price.
The
purchase price for the Shares shall be the transfer and delivery by Buyers
to
Seller of 44,450,000 shares of common stock of Seller that Buyers own (the
“Purchase Price Shares”), deliverable as provided in Section
2.2.
Each
Buyer owns 22,225,000 shares of common stock of Seller.
1.3 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;
provided,
however,
that the
Closing must occur immediately after the closing of the Merger. The date on
which the Closing occurs shall be referred to herein as the Closing Date (the
“Closing Date”).
II. CLOSING.
2.1 Transfer
of Shares.
At the
Closing, Seller shall deliver to Buyers certificates representing the Shares,
duly endorsed to Buyers or as directed by Buyers, which delivery shall vest
Buyers with good and marketable title to all of the issued and outstanding
shares of capital stock of Leaseco, free and clear of all liens and
encumbrances.
2.2 Payment
of Purchase Price.
At the
Closing, each Buyer shall deliver to Seller a certificate or certificates
representing the respective Purchase Price Shares duly endorsed to Seller,
which
delivery shall vest Seller with good and marketable title to the Purchase Price
Shares, free and clear of all liens and encumbrances.
2.3 Transfer
of Records.
On or
before the Closing, Seller shall transfer to Leaseco all existing corporate
books and records in Seller’s possession relating to Leaseco and its business,
including but not limited to all agreements, litigation files, real estate
files, personnel files and filings with governmental agencies; provided,
however,
when
any such documents relate to both Seller and Leaseco, only copies of such
documents need be furnished. On or before the Closing, Buyers and Leaseco shall
transfer to Seller all existing corporate books and records in the possession
of
Buyers or Leaseco 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 Leaseco or its business, only
copies of such documents need be furnished.
III. BUYERS’
REPRESENTATIONS AND WARRANTIES.
Each
Buyer severally represents and warrants to Seller and Xxxxxxxx
that:
3.1 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.
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3.2 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.
3.3 Purchase
for Investment.
Buyer
is financially able to bear the economic risks of acquiring an interest in
Leaseco and the other transactions contemplated hereby, and has no need for
liquidity in this investment. 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 Leaseco, 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. Buyer is acquiring the Shares solely for her
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 investment decision with respect
to
the acquisition of the Shares; (ii) had an opportunity to make such
investigation as she has desired pertaining to Leaseco and the acquisition
of an
interest therein, 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 Leaseco. Buyer acknowledges that Buyer is a director and former
officer of Seller, and a current director and officer of Leaseco and,
as
such, has actual knowledge of the business, operations and financial affairs
of
Leaseco. 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
Securities and Exchange Commission 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 Leaseco 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:
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.
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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.
3.4 Liabilities.
Following the Closing, Seller will have no liability for any debts, liabilities
or obligations of Leaseco 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 Leaseco or its business and that may survive the
Closing.
3.5 Title
to Purchase Price Shares.
Buyer
is the sole record and beneficial owner of the Purchase Price Shares. At
Closing, Buyer will have good and marketable title to the Purchase Price Shares,
which Purchase Price 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 Seller,
except for restrictions on transfer as contemplated by applicable securities
laws.
IV. SELLER’S
AND
LEASECO’S REPRESENTATIONS AND WARRANTIES.
Seller
and Leaseco, jointly and severally, represent and warrant to Buyers that:
4.1 Organization
and Good Standing.
Each of
the Seller and Leaseco is a corporation duly incorporated, validly existing,
and
in good standing under the laws of the State of Nevada.
4.2 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.
4.3 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 Buyers, except for restrictions on transfer as contemplated by
Section
3.3
above.
The Shares constitute all of the issued and outstanding shares of capital stock
of Leaseco.
4.4 WARN
Act.
Leaseco
does not have a sufficient number of employees to make it subject to the Worker
Adjustment and Retraining Notification Act (“WARN Act”).
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4.5 Representations
in Merger Agreement.
Leaseco
represents and warrants that all of the representations and warranties by
Seller, insofar as they relate to Leaseco, contained in the Merger Agreement
are
true and correct.
V. OBLIGATIONS
OF BUYERS
PENDING CLOSING.
Each
Buyer covenants and agrees that between the date hereof and the
Closing:
5.1 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
VI.
5.2 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.
VI. OBLIGATIONS
OF SELLER PENDING CLOSING.
Seller
covenants and agrees that between the date hereof and the Closing:
6.1
Business as Usual.
Leaseco
shall operate and Seller shall cause Leaseco 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 Leaseco.
Without limiting the generality of the foregoing, from the date of this
Agreement until the Closing Date, Leaseco shall (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 Leaseco’s
assets in their current operating condition and repair, ordinary wear and tear
excepted. From the date of this Agreement until the Closing Date, Leaseco 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 Leaseco nor Buyers
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.
6.2 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 Buyers to satisfy her
obligations as provided in Article
V.
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6.3 Assist
Performance.
Seller
shall exercise its reasonable best efforts to cause to be fulfilled those
conditions precedent to Buyers’ obligations to consummate the transactions
contemplated hereby which are dependent upon the actions of Seller and to work
with Buyers to make and/or obtain any necessary filings and consents. Seller
shall cause Leaseco to comply with its obligations under this
Agreement.
VII. SELLER’S
AND
LEASECO’S CONDITIONS PRECEDENT TO CLOSING.
The
obligations of Seller and Leaseco 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
and Xxxxxxxx in writing):
7.1 Representations
and Warranties; Performance.
All
representations and warranties of Buyers 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. Buyers 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 Buyers at or
prior to the Closing.
7.2 Additional
Documents.
Buyers
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.
7.3 Release
by Leaseco.
At the
Closing, Leaseco shall execute and deliver to Seller and Xxxxxxxx a general
release which in substance and effect releases Seller and Xxxxxxxx from any
and
all liabilities and obligations that Seller and Xxxxxxxx may owe to Leaseco
in
any capacity, and from any and all claims that Leaseco may have against Seller,
Xxxxxxxx, or their respective 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).
VIII. BUYERS’
CONDITIONS PRECEDENT TO CLOSING.
The
obligation of Buyers 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 Buyers in
writing):
8.1 Representations
and Warranties; Performance.
All
representations and warranties of Seller and Leaseco 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 Leaseco 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.
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IX. OTHER
AGREEMENTS.
9.1 Expenses.
Each
party hereto shall bear its expenses separately incurred in connection with
this
Agreement and with the performance of its obligations hereunder.
9.2 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 Buyers shall return any information received by Buyers from
Seller or Leaseco, and Buyers shall cause all confidential information obtained
by Buyers concerning Leaseco and its business to be treated as
such.
9.3 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.
9.4 Access
to Information Post-Closing; Cooperation.
(a) Following
the Closing, Buyers and Leaseco 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
Buyers or Leaseco insofar as such access is reasonably required by Seller.
Information may be requested under this Section
9.4(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 Leaseco existing at the Closing Date shall be destroyed
by
Buyers or Leaseco 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.
(b) Following
the Closing, Seller shall afford to Leaseco 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 Leaseco. Information may
be
requested under this Section
9.4(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 Leaseco 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 Buyers at least 30 days prior written notice,
during which time Buyers shall have the right to examine and to remove any
such
files, books and records prior to their destruction.
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(c) At
all
times following the Closing, Seller, Buyers and Leaseco shall use reasonable
efforts to make available to the other party on written request, the current
and
former officers, directors, employees and agents of Seller or Leaseco for any
of
the purposes set forth in Section
9.4(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 Leaseco may from time to be involved.
(d) The
party
to whom any Information or witnesses are provided under this Section
9.4
shall
reimburse the provider thereof for all out-of-pocket expenses actually and
reasonably incurred in providing such Information or witnesses.
(e) Seller,
Buyers, Leaseco 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,
Buyers and Leaseco 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.
9.5 Guarantees,
Surety Bonds and Letter of Credit Obligations.
In the
event that Seller is obligated for any debts, obligations or liabilities of
Leaseco 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,
Buyers and Leaseco shall use 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. Buyers and Leaseco,
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.
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9.6 Filings
and Consents.
Buyers,
at their 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. Buyers shall indemnify the Seller Indemnified Parties (as defined in
Section
11.1
below)
against any Losses (as defined in Section
11.1
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, Buyers and Leaseco confirm that the
provisions of this Section
9.6
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
VII
above.
9.7 Insurance.
Buyers
acknowledge that on the Closing Date, effective as of the Closing, all insurance
coverage and bonds provided by Seller for Leaseco, and all certificates of
insurance evidencing that Leaseco 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.
9.8 Agreements
Regarding Taxes.
(a) Tax
Sharing Agreements.
Any tax
sharing agreement between Seller and Leaseco 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 Leaseco (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 Leaseco 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 Leaseco, and both Seller and Leaseco 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, Leaseco and
Buyers agree to report all transactions not in the ordinary course of business
occurring on the Closing Date after Buyers’ purchase of the Shares on Leaseco’s
tax returns to the extent permitted by Reg. §1.1502-76(b)(1)(ii)(B). Buyers
agree 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 Leaseco during the Pre-Closing Period or on the
Closing Date after Buyers’ purchase of the Shares. Leaseco 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
Leaseco’s past custom and practice.
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(c) Audits.
Seller
will allow Leaseco and its counsel to participate at Leaseco’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
Leaseco. 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 Buyers
or Leaseco or any other party acting on behalf of Buyers or Leaseco, provided
that Seller will not settle any such audit in a manner which would materially
adversely affect Leaseco after the Closing Date unless such settlement would
be
reasonable in the case of a person that owned Leaseco both before and after
the
Closing Date. In the event that after Closing any tax authority informs the
Buyers or Leaseco of any notice of proposed audit, claim, assessment or other
dispute concerning an amount of taxes which pertain to the Seller, or to Leaseco
during the period prior to Closing, Buyers or Leaseco 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 Buyers or Leaseco do not notify the Seller within
such 15 day period, Buyers and Leaseco, 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 9.8 shall control over the provisions of Section
11.2 below.
(d) Cooperation
on Tax Matters.
Buyers,
Seller and Leaseco 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. Leaseco shall (i) retain all books and
records with respect to tax matters pertinent to Leaseco 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, Buyers agree to cause Leaseco to
allow Seller to take possession of such books and records.
9.9 ERISA.
Effective as of the Closing Date, Leaseco shall terminate its participation
in,
and withdraw from, all employee benefit plans sponsored by Seller, and Seller
and Buyers shall cooperate fully in such termination and withdrawal. Without
limitation, Leaseco 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. Buyers and Leaseco acknowledge that Leaseco 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 Leaseco is terminated after the
Closing Date.
10
X. TERMINATION.
This
Agreement may be terminated at, or at any time prior to, the Closing by mutual
written consent of Seller, Buyers and Xxxxxxxx.
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.
XI. INDEMNIFICATION.
11.1 Indemnification
by Buyers.
Buyers
covenant and agree to jointly and severally indemnify, defend, protect and
hold
harmless Seller, and its officers, directors, employees, stockholders, agents,
representatives and affiliates (collectively, together with Seller, 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 Buyers 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
Buyers to indemnify Seller set forth in this Agreement) on the part of Buyers
under this Agreement, (iii) any debt, liability or obligation of Leaseco,
(iv) the conduct and operations of the business of Leaseco whether before
or after Closing, (v) claims asserted against Leaseco whether before or
after Closing, or (vi) any federal or state income tax payable by Seller
and attributable to the transaction contemplated by this Agreement.
11.2 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 Buyers have an indemnification obligation under the terms of
Section
11.1,
then
the Indemnitee shall notify Buyers (the “Indemnitors”) 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 Indemnitors 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 Indemnitors. If the
Indemnitors 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, through counsel reasonably satisfactory to Indemnitee, then the
Indemnitors 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 Indemnitors continues such defense until the final
resolution of such Third-Party Claim. The Indemnitors 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 Indemnitors 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 Indemnitors from any
indemnification liability except only to the extent that the Indemnitors are
materially and adversely prejudiced by such failure.
11
(b) Failure
to Defend.
If the
Indemnitors 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 Indemnitors 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 Indemnitors
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.
11.3 Non-Third-Party
Claims.
Upon
discovery of any claim for which Buyers have an indemnification obligation
under
the terms of this Section
11.3
which
does not involve a claim by a third party against the Indemnitee, the Indemnitee
shall give prompt notice to Buyers of such claim and, in any case, shall give
Buyers such notice within 30 days of such discovery. A failure by Indemnitee
to
timely give the foregoing notice to Buyers shall not excuse Buyers from any
indemnification liability except to the extent that Buyers are materially and
adversely prejudiced by such failure.
11.4 Survival.
Except
as otherwise provided in this Section
11.4,
all
representations and warranties made by Buyers, Leaseco 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
XI
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 Buyers for Losses incurred
by a Seller Indemnified Party due to breaches of its representations and
warranties in Article
III
of this
Agreement, and (d) liability of Buyers for Losses arising out of
Third-Party Claims for which Buyers 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.
12
XII. MISCELLANEOUS.
12.1 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:
0000
Xxxx
Xxx Xx Xxxxxxx, Xxxxx X0000
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx XxXxxxxx, Chief Executive Officer
Facsimile:
[to come]
With
a
copy to (which shall not constitute notice hereunder):
Xxxxx
Xxxxxx LLP
800
- 000
X Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX X0X 0X0 Xxxxxx
Attn:
Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile:
(000)000-0000
(b) If
to
Buyers or Leaseco, addressed to:
c/o
Xxxxx
Xxx
#0
0000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
With
a
copy to (which shall not constitute notice hereunder):
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
(c) If
to
Xxxxxxxx, addressed to:
0000
Xxxx
Xxx Xx Xxxxxxx, Xxxxx X0000
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx XxXxxxxx, Chief Executive Officer
Facsimile:
[to come]
With
a
copy to (which shall not constitute notice hereunder):
13
Xxxxx
Xxxxxx LLP
800
- 000
X Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX X0X 0X0 Xxxxxx
Attn:
Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile:
(000)000-0000
or
to
such other address as any party hereto shall specify pursuant to this
Section
12.1
from
time to time.
12.2 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.
12.3 Time.
Time is
of the essence with respect to this Agreement.
12.4 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.
12.5 Further
Acts.
Seller,
Buyers and Leaseco shall execute any and all documents and perform such other
acts which may be reasonably necessary to effectuate the purposes of this
Agreement.
12.6 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,
including Xxxxxxxx. No provisions of this Agreement or any rights hereunder
may
be waived by any party without the prior written consent of
Xxxxxxxx.
12.7 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.
12.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Nevada, without giving effect to principles of conflicts or choice
of
laws thereof.
12.9 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.
14
12.10 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.
12.11 Specific
Performance; Remedies.
Each of
Seller, Buyers and Leaseco acknowledges and agrees that Xxxxxxxx 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 Seller, Buyers and Leaseco agrees that Xxxxxxxx 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
12.8,
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.
12.12 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 Nevada 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.
(b) EACH
PARTY TO THIS AGREEMENT HEREBY AGREES TO WAIVE HIS OR HER 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.
15
12.13 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.]
16
IN
WITNESS WHEREOF,
the
parties hereto have hereunto set their hands as of the day and year first above
written.
| XXXXXXXX URANIUM CORP. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
|
Name: Xxxxx Xxxxxx |
||
| Title: President | ||
| ARBUTUS LEASECO, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
|
Name: Xxxxx Xxxxxx |
||
| Title President | ||
| BUYERs | ||
| |
|
|
| /s/ Xxxxx Xxx | ||
|
Xxxxx Xxx |
||
| /s/ Xxxx Xxxxx | ||
|
Xxxx Xxxxx |
||
| XXXXXXXX URANIUM HOLDINGS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx XxXxxxxx | |
|
Name: Xxxxxx XxXxxxxx |
||
| Title: Chief Executive Officer | ||
17
